As an economic powerhouse for New Zealand’s trade with the rest of the world, Auckland is developing a range of measures that will, long-term, provide sustained tourism growth for the whole country. Chris Penney takes a look at the plans and prospects of its airport.
Auckland, known as the City of Sails thanks to its maritime heritage, is home to New Zealand’s premier air gateway. Located at the northern end of the country’s North Island, over 70% of the country’s international travellers pass through it. But the past 18 months have been far from plain sailing for Auckland International Airport (AKL). The turbulent economic winds buffeting it have been as strong as those blowing across the yachts in Manukau Harbour that surround it. However, while world events that so impacted AKL’s traffic last year are now in the past, 2011 will live long in the management team’s memory for variety of reasons.
Rugby World Cup
In 2011, 75% of New Zealanders travelling outbound – that represents 1.5 million people – flew overseas from Auckland. It is now the third-busiest passenger airport in Australasia and in terms of cargo handled, it ranks as the country’s second-largest port by value.
So when it was announced that New Zealand had beaten Japan to host the 2011 Rugby World Cup (RWC), it was a reason to celebrate and roll out the red carpet – the country would be welcoming the world and Auckland was where that welcome would ‘kick off’.
More than a hundred separate programmes were implemented by AKL in anticipation of the sporting extravaganza and while the hoped-for financial return for the country proved optimistic, there is no doubt that the airport benefited hugely from the investment made. Arriving some six months afterwards, I was able to witness for myself the makeover that both arrival and departure areas had experienced.
Walking off the aircraft you are greeted by the welcoming call of the Karanga as you pass through a traditional carved wood Maori archway and into a sound and light experience. The corridor walls on either side have been transformed into landscape scenery showing a series of images from around the country complemented by typical Kiwi sound-bites: the soundtrack is activated by people moving through the archway. For those waiting in landside arrivals to greet passengers, new, large digital screens present moving footage of the many natural wonders the country has to offer.
Measures taken to ensure the smooth running of the airport during the Rugby World Cup included changes to the International Terminal’s forecourts to ensure better traffic flow and public transport access. Signage across the airport was improved and upgraded along with an extra security screening area, and new machines installed at the Domestic Terminal to deal with possible congestion peaks. All electrical and IT systems were overhauled, serviced and thoroughly tested under operating conditions to ensure there would be no embarrassing breakdowns. The fact that the home nation’s team – the All Blacks – won the competition was the icing on the cake.
During the RWC, 95% of arriving international passengers were processed in under 31 minutes – the average handling time being just 15 minutes. For the final match 21 corporate jets visited AKL and the following day 15,000 international passengers were processed through departures, a new record at the time.
Sustained Traffic Growth
It hasn’t only been the current global, financial and economic meltdown that’s hit Auckland’s traffic in recent times: natural disasters around the Pacific Rim have also impacted New Zealand’s valuable tourist industry. Flooding and cyclones in Australia, Japan’s tsunami and an ash cloud from a volcano in Chile all affected last year’s passenger numbers, but the sting in the tail was the country’s own earthquake down in Christchurch on the South Island.
The traditional inbound UK tourist market has also seen a downturn and Air New Zealand is realigning its network to cope with a changed international marketplace – a process it says is not yet complete.
The RWC certainly produced a one-off traffic bounce: over 13.8 million passengers were processed in 2011, up 2.8% on the previous year. Since then traffic has picked up again. Over seven million international passengers (excluding transit passengers) were handled for the first time in one financial year (ended June 30, 2012). The total international passenger numbers (excluding transits) were up 5.4% on the previous financial year. The airport said these key growth areas were due to extra arrivals from passengers resident in China and Australia and an increase in overseas trips by New Zealanders.
From overseas, Australians are the airport’s most frequent visitors, followed by British, Americans and Chinese. But Auckland’s market dynamics are changing fast and in terms of numbers, by the end of 2012, Chinese tourists are expected to be second only to Australians. Air New Zealand first served China in 2006 and currently operates to Shanghai, while China Southern started a Guangzhou route last year, and by year-end the number of Chinese visitors had grown by 26%. Chinese tourists to New Zealand now have the highest average spend per night – second only to the Japanese – and the airport is keen to encourage measures such as a revised immigration visa policy, border controls and air rights that make tourism easier and will, in the long-term, encourage more Chinese to visit. That’s why in April this year Auckland warmly welcomed the New Zealand Government’s expanded air service agreement with China, allowing the two countries 21 return flights each per week.
Elsewhere, capacity and services have been increased across the board for all the major Asian markets including Hong Kong, Korea, Taiwan and Japan. It is the same story with Southeast Asia, with a new service introduced by Qantas’ low-cost arm, Jetstar, to its Singapore hub; Malaysia Airlines upping frequency; THAI going daily; and, on the day of the author’s visit, Garuda announcing a deal to serve Auckland in the near future. Meanwhile Emirates, which already operates one A380 to Auckland, will soon replace a Boeing 777 for an A380 on a second service.
Longer-term, the airport has recognised that, to fully reach its full economical potential for the country, there is a lot more to do. The management team recognises that with neighbouring Australia being bigger and geographically closer to the Asian market than Auckland is, the New Zealand tourist industry has to work harder to attract visitors. AKL has worked hand-in-hand with Tourism New Zealand and its airline partners for a number of years in developing sustainable traffic growth and the most notable statistics from 2011 were that visitors from Singapore and India rose by 23% and 14% respectively.
To create a more integrated, national approach to New Zealand’s future tourism potential, AKL has launched Ambition 2020, which involves Asia-specific training workshops, social media programmes, celebrity ambassadors and establishing joint promotions with tourism partners. The aim is to increase the number of direct flight visitor arrivals from 50,000 today to 170,000 by 2020. This comes on the back of the government’s ongoing review of air service agreements with eight countries including China and Brazil. AKL’s CFO, Simon Robertson, told Airports International: “Airfreight is still largely carried in the belly-hold of scheduled flights. That’s why scheduled passenger routes are so vitally important for the country’s trade.”
The management team believes there is potential to grow total international visitor arrivals to over 3.5 million by 2020, up from 2.6 million in 2011. More importantly, the value generated by these extra visitors could leap ahead of official forecasts to NZ$8.5 billion (US$6.7bn) from the NZ$5.76 billion (US$4.55bn) taken in 2011. The aim includes doubling Chinese arrivals by 2016 and raising visitor numbers from India 50% by 2014.
As AKL begins to see the benefit of the new strategy, the expectation is that Chinese visitor numbers will eventually grow from 160,000 today to 430,000 in 2020. Also significant is that, with its geographical location, Auckland is promoting itself as a future Asia-South America transit hub for passengers and freight, particularly as China has growing business interests in Latin America.
New Domestic Terminal
Due to the global financial downturn, capital infrastructure projects are on hold, as Mr Robertson explained. “We decided instead to focus on terminal processing and the use of smarter technology to get more throughput from the same infrastructure, making it quicker and easier for trans-Tasman passengers and a speedier airport process overall. All airport stakeholders were involved to make the journey through the airport faster and more efficient.”
Work has stopped on a second, shorter, parallel runway which, when finally completed, will relieve the main runway of the bulk of domestic turbprop movements. Since Air New Zealand has expanded its feeder network into Auckland, domestic flights now number over 110,000 annually – nearly three times the number of international flights. However, the second runway will be needed to overcome wake turbulence separation which is constraining growth at peak times of the day.
Jetstar’s introduction to the domestic market, and Air New Zealand’s renewal of its domestic fleet with larger A320s and more ATR72s, is putting a strain on Auckland’s Domestic Terminal, which desperately needs replacing. From a transfer passenger’s point of view the terminal was already being described as AKL’s ‘Achilles’ heel’ when Airports International last visited in 2005.
If you are unlucky enough to be too far down the queue for the first transfer bus to the Domestic Terminal, you would probably want to wait for the next one as it is a considerable walk to undertake – especially if you have luggage.
On IATA’s service-level standard rating for terminals, which range from ‘A’ (optimal) to ‘F’ (poor), the Domestic Terminal rates ‘D’ in its current state which, when future traffic trends are fed into the equation, is at risk of moving backwards towards an ‘E’ rating. Facing this situation, AKL has, in consultation with the airlines, deferred a decision on what type of terminal will replace it and where it will be built. The choice is either to relocate it within taxiing distance of the new second runway or to redevelop the existing site.
With this much-needed development work in mind the airport published its latest pricing schedule on June 6. It describes overall charges per passengers to airlines as remaining “flat in real (inflation adjusted) terms” for the next five years. The schedule follows a long consultation process and includes a first-year reduction in international charges and an increase in domestic charges – which, says AKL, is largely to fix its problems with the Domestic Terminal.
The airport says that the key structural pricing changes are the removal of a separate international terminal service charge; the removal of Domestic Terminal lease charges relating to passenger processing areas; the introduction of an international transit and transfer charge; and the phased introduction of passenger charges “for two-to-eleven-year-olds in order to be consistent with most Australian airport pricing practices”.
The airport’s CEO, Simon Moutter, commented that average charges would reduce by $0.58 (US$0.46) to $21.55 (US$17.05) per international passenger – and would increase by $1.32 (US$1.04) to $5.55 (US$4.39) per domestic passenger for the 2013 financial year, commencing 1 July 2012. Over the next four years, he said, average charges will increase by around 2% annually, broadly in line with the expected rate of inflation, adding: “All airport charges are collected from airlines and form part of their cost of operations.”
Mr Moutter said the reduction in international charges was the first for Auckland Airport since it became a listed company in 1998, and showed how its focus on developing new air services is benefiting travellers through lower pricing. He explained that the increase in domestic charges largely reflected the need to invest in high-priority modifications over the next 18 months to expand the capacity of the Domestic Terminal in the shorter-term, so it can cope with the increasing size of aircraft being used on main domestic routes.
“Travellers will be more than aware we are experiencing space constraints at the current Domestic Terminal, which was built over 45 years ago in a very different era. These constraints will only worsen as growth continues and airlines continue to upgrade to larger aircraft. The modifications will patch-up the existing Domestic Terminal for a few more years while we finalise our longer term plans for a new terminal.”
The CEO went on to say he appreciated that many travellers want to see a brand new terminal “sooner rather than later”, and that he had originally hoped to announce plans for a new one at the same time as the updated pricing. “We’ve had lots of constructive feedback from airlines on our initial plans and it’s important that we take this into account. The new terminal will be a key part of Auckland Airport, the domestic travel experience and New Zealand’s tourism and trade infrastructure for many years to come, so we firmly believe it’s worth spending a bit more time now getting the plans right.”
The timing of the resumption of work to complete the second (northern) runway would also be considered as part of the terminal consultation. A number of modifications will be made over the next 18 months to “patch it up” while longer-term plans for the new terminal and runway are finalised.
Meanwhile, airside, the airport has been tackling the issue of bird strikes. With its harbour location, the large surrounding grassed areas are a magnet for birds, and some have been reseeded with a new type of grass called Jackal. Developed at an agricultural research station the grass contains a natural fungus that produces chemicals harmless to birds but, when eaten, makes them feel sick. The grass also has the added benefit of deterring insect life, thereby further discouraging birds from visiting. So far, early indications are that the trial is proving successful.
In response to the growing self-drive holiday market, Auckland has opened New Zealand’s first on-airport campervan facility, providing a conveniently located place to rest up and relax before or after journeys. It features 54 electrically-powered bays with fresh water, set within landscaped gardens with easy access to toilets, showers, kitchen and laundry facilities. It also has WiFi access. Fully fenced and secure, with CCTV and regular security patrols, it complements other on-airport relaxation facilities such as paintball, a butterfly sanctuary, cafes, shopping, mini golf, a supermarket, a high ropes course and a golf driving range.
In addition, the airport’s first on-site hotels have recently opened, each with a different market in mind. A Novotel has been built opposite the International Terminal while a Formula 1 budget motel is just a short walk away. Both are part of AKL’s major new accommodation and hospitality initiative.
Meanwhile the airport is developing plans to speed up journey times to and from downtown Auckland some 13 miles (21km) away. While an increase in the number and frequency of bus and coach links is being sought, the possibility of some form of rapid transit system is under evaluation.
Farewell New Zealand
The International Terminal has undergone a number of changes since 2009, the most significant being the addition of two Airbus A380-capable piers which double as four Airbus A320/Boeing 737 stands. Inside, retail and duty-free areas were either expanded or refurbished for the RWC. More recently AKL has opened its own Emperor lounge. Situated next to the duty-free shops run by DFS and JR Duty Free, passengers can, for a one-off fee, shower, work or just relax before their overnight flight.
Passengers’ departure experience has been enhanced by the unveiling of the ‘Pou Manawa’, or farewell tree as it has become known to staff. In designing the terminal’s new retail departures area, AKL wanted to create the idea of a ‘heart’ space – an engaging, central focus that people would gravitate towards – and the 29ft (9m)-high tree design, with a canopy that spreads across the roof of airside departures, was conceived.
Ignite Architects developed its timber-panelled trunk and tiled base while Fabric Structure Systems developed the the fabric canopy which, using 24 theatrical-type gobo projectors and LED lights, generates a continuous 360° image on the patterned internal surface of the tree.
Six main themes are reflected through the 36-minute projection cycle on the Pou Manawa: Ocean, Flax, Fern, Night Sky, Sunrise/Sunset and Pohutakawa – and traditional Maori designs as well as mammals, birds and other native species are projected onto the canopy, generating patterns that float across it to the sound of breaking waves and bird song. It is a stunning feature that’s a fitting farewell to Auckland.