Kia ora!

On the 7th of July 2021, our exec committee gathered with the public to hold our annual AGM. We had several speakers and discussed exciting initiatives which we will be working on over the next half of 2021. We remain committed more than ever to ensure the community comes first in the Eastern Suburbs, and the airport second.

We look forward to meeting with the community on these very important topics in the next few months.

Here is the minute of our hui: Guardians of the Bays AGM 2021 minute.

[gview file=”https://guardiansofthebays341400583.files.wordpress.com/2021/06/b9310-gotb-submission-guide-v3_130716.pdf”%5D

We understand that a number of opponent submitters are concerned about the section in the GWRC submission form that asks us to identify whether we wish to request an Independent Commissioner to hear and decide the application because of the potential cost implications identified. Please note, this question is only relevant where Council hearings are concerned. As you know, WIAL has asked for the hearing to be directly referred to the Environment Court. If that happens, this question becomes irrelevant. 
 
The Councils have not yet released a decision on whether they will refer the application directly to the Environment Court, which is why the question asking whether submitters want an Independent Commissioner remains in the GWRC template submission form. However, submitters will find this out before the submission period closes on 12 August 2016. For this reason, we suggest submitters not concern themselves with this question at this stage and await the decision on direct referral. We consider that it is highly likely that the application will be referred to the Environment Court. We will update our website when the Councils release their decision on direct referral.

This report clearly shows why Christchurch, not Wellington, is the obvious second long-haul airport in New Zealand. In summary:

  • ChCh airport already has a well-established runway that can fly in large, long-haul planes safely
  • ChCh airport has no curfew and does not operate in the middle of the city
  • ChCh has greater tourism and manufacturing and industry importance than Wgtn
  • ChCh airport is higher ranked on most metrics than Wgtn: on ASKs (average seat km), seats and cargo payload
  • It also has a higher degree of choice for passengers
  • Emirates, Singapore, China Southern and Fiji airlines already fly long-haul from ChCh
  • It has much greater cargo capacity than Wgtn
  • It already has 3 runways and a completed major terminal upgrade
  • It is entirely in the public hand (75% City Council, 25% NZ Govt) and will remain so
  • Queenstown, not Wellington is its biggest competitor (but not for long-haul flights). Queenstown is the second busiest airport in the country already.

REPORT:

New Zealand is a remote country and Christchurch, on the South Island, a more remote city than either Auckland or Wellington. Being located at the far end of the world must impact on connectivity.

The government has transformed New Zealand from an agrarian economy into a more industrialised, free market one that can compete globally and Christchurch plays its part with specialised industrial and commercial activities. For these reasons, and others – notably tourism – the airport there has established itself as, at least jointly, the country’s second most important one. Christchurch airport has also played an important part in the city’s recovery from recent serious earthquake events.

This report examines Christchurch International Airport by way of several sets of metrics, looks at the airports that can be considered rivals to it, and at its construction activities and ownership.

An overview of New Zealand’s history and economy

The British colony of New Zealand became an independent dominion in 1907. It assumed a non-permanent seat on the UN Security Council for the 2015-16 term, an indicator of the progress by this small country of only 4.7 million people onto the global stage, a country the same size by population as Ireland or Costa Rica.

The islands of New Zealand are isolated from Australia across the 2000km (1200 mile) Tasman Sea, with Chile 9000 km to the east, Antarctica  to the south and – apart from a few South Pacific islands – the nearest northern landfall being far western Russia in the Bering Sea. New Zealand is about as remote and secluded as it gets for an economy to operate successfully. That remoteness ensured that it was one of the last places to be settled by humans.

Map locating Christchurch in relation to Wellington and Auckland, and New Zealand in relation to major Australian cities

The capital and administrative centre, Wellington, and the commercial one, Auckland, are both situated on the North Island, so the prospects for developing international air transport (especially direct flights) on the South Island at Christchurch must be adversely affected.

Over the past 30 years the government has transformed New Zealand from an agrarian economy, dependent on concessionary British market access, into a more industrialised, free market economy that can compete globally. This dynamic growth has boosted real incomes, and has broadened and deepened the technological capabilities of the industrial sector.

Per capita income rose for 10 consecutive years until 2007 but fell in 2008-09. Debt-driven consumer spending drove robust growth in the first half of the decade, fuelling a large balance of payments deficit that posed a challenge for policymakers. Inflationary pressures caused the central bank to raise its key rate steadily from Jan-2004 until it was among the highest in the OECD in 2007-08.

The economy fell into recession before the start of the global financial crisis and contracted for five consecutive quarters in 2008-09. In line with global peers the central bank cut interest rates aggressively and the government developed fiscal stimulus measures. The economy pulled out of recession in 2009, and achieved 2%-3% growth between 2011 and 2015. Nevertheless, key trade sectors remain vulnerable to weak external demand and lower commodity prices. In the aftermath of the Canterbury earthquakes (see below) the government has continued programmes to expand export markets, develop capital markets, and invest in innovation.

GDP growth fell slightly in 2015 and is projected to continue at 2.4-2.5% through the next five years. The following text and charts deal with the New Zealand economy in general.

GDP Growth of New Zealand (percentage change)

Inflation dipped to 0.3% in 2015 but is expected to rise to 1.5% in 2016.

Inflation and average consumer prices of New Zealand (percentage change)

The unemployment rate is expected to remain static during the next few years.

Unemployment rate of New Zealand (percentage of total labour force)

A  logical comparison is New Zealand with Australia. In 2015 Australia’s GDP growth rate was slightly higher than New Zealand’s at 2.37%. Inflation in Australia was much higher at 1.8%, while the unemployment rate was 0.5 percentage points higher than New Zealand’s.

Tourism – Asia Pacific overtakes traditional UK inward visitor market

The inward visitor market to New Zealand is dominated by Australia as might be expected. However, Asian markets have been growing strongly led by China, which now accounts for over 11% of visitors. China and the US have overtaken the traditional UK visitor market while the figure for Japan has risen to 2.8%, though that is still some way behind the UK’s percentage share. Of the top 12 visitor source countries eight are in Asia Pacific.

Visitor arrivals by market, 2015

After stagnating between 2010 and 2012 visitor numbers have been growing steadily.

New Zealand annual visitor arrivals, 2010-2015

Modern-day New Zealand is a developed country with a market economy that is dominated manufacturing and tourism, along with exports of dairy products, meat and wine. The nation is rated as a World Bank high income economy.

Auckland, on the North Island, is the largest and most populous urban area with a population of 1,454,300 – 32% of the national total. It is the largest Oceanian city outside Australia and is rated as a Beta World City. It is the economic capital of the country.

The capital city, administrative centre and second most populous urban area is Wellington (population 400,000), also on the North Island but at the south western tip, close to the Cook Strait between North and South Islands.

Christchurch – agriculture, light engineering and CIT are the main industries

Christchurch is the largest city on the South Island and is the seat of the Canterbury Region. The population is 381,800, making it New Zealand’s third most populous urban area.

The agricultural industry has always been at the economic centre of Christchurch, farming being part of the original ‘package’ by which New Zealand was sold to immigrants. The high quality of local wine has increased the appeal of Canterbury and Christchurch to tourists.

Christchurch is also the second largest manufacturing centre in New Zealand

However, Christchurch is also the second largest manufacturing centre in New Zealand after Auckland, the sector being also the second largest contributor to the local economy. While heavy engineering including steel work once predominated, manufacturing is now mainly of light products and the key market is Australia. Before clothing manufacture largely moved to Asia Christchurch was the centre of the New Zealand clothing industry. The firms that remain mostly design and market their goods, with manufacture taking place in Asia.

In the last few decades technology-based industries have sprung up in Christchurch, including mobile phones and software. Locally and nationally the IT sector is known not for its size (being the third largest in New Zealand), but for producing innovative, entrepreneurial solutions, products and concepts.

Tourism is also a significant part of the local economy. Its hotels, a casino, the close proximity of the ski fields and other attractions of the Southern Alps and other factors make Christchurch a stopover point or destination for many tourists. The city is particularly popular with Japanese tourists. In this respect, having an airport that meets international standards is a clear requisite.

The city was rocked by two major earthquakes – in Sep-2010 and Feb-2011. The second caused most of the damage and casualties and an insurance bill of up to NZD30 billion. Smaller earthquakes have frequently affected the city and region since then, and 4500 of them were recorded in the Canterbury region in a four year period between 2010 and 2014.

However, the city has experienced rapid growth following the earthquakes. The central city rebuild has been gaining in momentum and there has been big growth in the residential sector, with approximately 50,000 new houses expected to be constructed in the Greater Christchurch area by 2028. The airport was widely praised for the way its emergency plan dealt with the effects of the two largest earthquakes.

These airport profiles often contrast and compare the target airport with a set of peer airports, nationally or internationally or both.

In this instance the selected airports are Auckland and Wellington within New Zealand. Additionally: Brisbane in Australia (the centre of a tourism industry, as is Christchurch), and Perth in Australia because it is similarly remotely situated away from the economic and aviation hubs of the eastern part of Australia.

The two tables below compare these airports.

Some are O&D airports handling tourism or business traffic or both. Others are hubs, though this is at a minor level on a global scale.

Rankings by assorted metrics (1):  

Airport/metric world ranking Type ASKs Seats Frequencies Cargo payload Pax 2015 (unless stated) (million) City population (million)
Christchurch O&D 279 266 227 295 6.1 0.4
Auckland O&D/hub 60 114 115 109 16.3 1.5
Wellington O&D/hub 372 270 192 339 5.7 0.5
Brisbane O&D 66 85 85 94 22.2 3.4
Perth O&D/hub 77 147 180 118 13.8 2.2

Within New Zealand it can be seen that Christchurch has a greater aeronautical impact than does Wellington, though both trail Auckland. That Christchurch is almost 100 places higher in the ASK ranking than Wellington is testimony to its ability to attract long haul flights. Notably, the Australian market is significantly larger all round, whether expressed in terms of population or aviation metrics.

The table below summarises Christchurch International Airport’s (CIA’s) route network and the table below that compares CIA with its peer group in network terms.

Christchurch International Airport, network summary (at 26-Apr-2016)

Total Airlines 9
    Domestic only 1
    International 8
Total nonstop passenger destinations 23
    Domestic 15
    Africa 0
    Asia Pacific 8
    Europe 0
    Latin America 0
    Middle East 0
    North America 0
Total nonstop freight destinations 2
    Domestic 1
    Africa 0
    Asia Pacific 1
    Europe 0
    Latin America 0
    Middle East 0
    North America 0

Rankings of selected peer airports with Christchurch airport, by assorted metrics (2): 

Airport Total airlines Pax traffic 2015 (unless stated) (million) Airline to pax ratio International airlines Nonstop passenger destinations Nonstop freight destinations
Christchurch 9 6.1 0.67 8 23 2
Auckland 24 16.3 0.68 23 52 6
Wellington 7 5.7 0.81 5 24 0
Brisbane 26 22.2 0.85 21 61 6
Perth 23 13.8 0.6 21 38 1

A low reading in the airline to pax ratio column can indicate a higher degree of choice for passengers at any individual airport, and Christchurch has one of the lowest of the group.

The table shows that Christchurch has three more international airlines operating than Wellington, although the number of international destinations is similar.

Again, the clear leader in all categories in New Zealand is Auckland Airport, although that airport is smaller in its size and scope than Brisbane.

Seat capacity growth overtaken by traffic growth in 2015

Seat capacity has been growing at a rate of a little over 5% per annum for the last two years, after a previous year of static growth.

CIA, seats capacity year-on-year, system-wide

Passenger traffic figures rose less quickly than capacity in 2014, but at a slightly higher rate than capacity in 2015 (+5.4%).

Christchurch International Airport, annual passenger numbers

22% of seat capacity at CIA is domestic. Christchurch serves a wide variety of domestic airports, approximately 15 in all and including the Chatham Islands to the east.

Christchurch International Airport, international vs. domestic capacity seats share (25-Apr-2016 to 1-May-2016)

Air New Zealand has two thirds of total seat capacity

Christchurch is one of three Air New Zealand hubs and the airline dominates capacity at CIA, with a  67.2% share. The range in capacity is vast, with Air New Zealand having 103,000 seats in this chart period and Air Chathams – just 100.

Jetstar Airways, the Qantas Group LCC subsidiary, is the second largest airline and operates domestic services.

Otherwise no airline has over 4.1% of capacity, as is the case with Virgin Australia, Australia’s second largest airline, whose Virgin Australia NZ division (previously Pacific Blue) was integrated back into Virgin Australia in Aug-2014.

Intercontinental airlines such as Emirates, Singapore Airlines, China Southern and Fiji Airways have an important role to play: keeping Christchurch/Canterbury connected to the wider world and sponsoring greater trade. However, their combined contribution in capacity terms comes to only 7% of the total.

CIA capacity seats, per week, system, all airlines, 25-Apr-2016 to 01-May-2016

In terms of regional seat capacity the Southwest Pacific region has easily the greatest number of seats, followed by Southeast Asia and Northeast Asia respectively. (The Middle East is not shown because Emirates flies via Sydney and Bangkok, so seats are registered to/from Southeast Asia). The lack of direct services to and from Europe is evident and that region is catered for indirectly by connections via Auckland, Australia, Singapore and the Middle East.

In the current climate of airline cooperation either via formal alliances, code shares or by ad hoc ‘beyond code share’ arrangements it would be economically difficult to justify a direct nonstop service, even using a B787 or A350, and even if the aircraft had the range. Similarly with flights to North America, which can be taken in a range of other indirect ways.

Individually, Australia has the greatest capacity (27682 seats) and Fiji the least (668).

CAI capacity seats by region, 25-Apr-2016 to 01-May-2016

This scenario is clarified further in the seat capacity ‘heat map’ below.

CAI international capacity seats by region ‘heat map’, 25-Apr-2016 to 01-May-2016

CIA’s current route network appears below. Again it emphasises the locality of the majority of air services and the small number of intercontinental connections, though these are important.

Nonstop connectivity – total number of services the same as at Wellington

The chart below again shows clearly how all the direct, nonstop services at CIA are to and from the Asia Pacific region. The total number of services is the same as at Wellington. There are no direct services to Europe from any of the peer group airports, though there are five to North America from Auckland.

Nonstop connectivity values of Christchurch, Auckland, Wellington, Brisbane and Perth departing airports for 25-Apr-2016 to 01-May-2016

Mainly a ‘full service’ airport

Four fifths of seats at CIA are on full service airlines, with almost all the remainder on LCCs.

CIA capacity seat share by airline type (system), 25-Apr-2016 to 01-May-2016

The table below compares that traffic split with the airport’s peer-competitors.

Comparison of selected airports by airline type – seat availability, 25-Apr-2016 to 01-May-2016  

Airport % of seats on FSCs % of seats on LCCs % of seats on other modes (e.g. regional, charter airlines) Clarification of previous column
Christchurch 80.1 19.8 0.1 Regional/commuter
Auckland 84.6 18.3 0.1 Regional/commuter
Wellington 79.0 18.9 2.1 Regional/commuter
Brisbane 86.1 13.6 0.3 Regional/commuter and charter
Perth 81.1 17.6 1.3 Regional/commuter and charter

This picture formed by this table is the most consistent of any produced in the series of airport profiles that has been published in the last six months (most of which were in Europe and the US). It is indicative of the way that low cost aviation has grown in both New Zealand and Australia but without supplanting full service airlines to a great extent. The percentage range for low cost is just 6.2 percentage points.

The table says little that differentiates Christchurch from the capital city airport or the chief commercial city airport in New Zealand.

Star is the dominant alliance

The main airline alliance at CIA is Star Alliance, through representation by Air New Zealand and, to a lesser degree, by Singapore Airlines. The alliance holds almost 70% of seat capacity, with hardly any representation from oneworld or SkyTeam. 28% of capacity is on unaligned airlines.

CIA capacity seats share by alliance (system), 25-Apr-2016 to 01-May-2016

The table below shows how these data compare with the peer group.

Comparison of CIA with selected peer group airports by alliance penetration – seat availability, 25-Apr-2016 to 01-May-2016

Airport % of seats on unaligned airlines % of seats on aligned airlines
Christchurch 27.8 72.2
Auckland 27.3 72.7
Wellington 24.7 75.3
Brisbane 54.1 45.9
Perth 54.9 45.1

Once again there is an evident and striking commonality between the three New Zealand airports, though this is doubtless brought about by the power of Air New Zealand in its home country. It is noticeable that the aligned airlines’ percentage figure is much lower at the two Australian peer group airports.

Seating types – a surprising lack of business class seats

Perhaps surprisingly, given Christchurch’s status as the South Islands’ chief economic driver, there are no first class seats into or out of Christchurch International Airport and the share of business class seating there is just 1.1%, compared with 4.4% at Auckland. (The worldwide average is 4.1%). Having said that, the business class percentage at Wellington is only 0.5%.

First class is almost completely absent from all of the peer group airports, amounting to just 0.2% at Auckland. Premium economy features at Auckland (1.9%, mainly on long haul services) but not at Christchurch or Wellington.

CIA schedule by class of seat – one-way weekly departing (airport comparison by seat type), (25-Apr-2016 to 01-May-2016)

Cargo – a greater balance between international and domestic capacity

As with passenger capacity cargo capacity has also increased steadily during the last three years, including an increase of 27.3% between 2013 and 2014. However, international cargo capacity is much greater than it is in the passenger arena, with domestic and international capacity balanced at 51.6%:48.4% respectively.

CIA total international capacity (cargo payload kg) by country, 25-Apr-2016 to 01-May-2016

While designated air freighters do visit CIA, according to OAG 100% of freight capacity is in passenger aircraft underbelly.

Again, Southwest Pacific is the major market as measured by capacity, but in this instance the percentage ratio has fallen in favour of Southeast Asia and North Asia.

CIA total international capacity (Cargo payload kg) by region 25-Apr-2016 to 01-May-2016

The largest single country markets by volume capacity are Australia (68.6%), Singapore, China, and Fiji. Sydney and Singapore are the top two routes.

Operational characteristics

CIA is unusual within the context of the CAPA airport profiles, being curfew-free and operating 24 hours a day

CIA is unusual within the context of the CAPA airport profiles, being curfew-free and operating 24 hours a day. It is situated in a suburb, Harewood, but 12 km (7.5 miles) from downtown.

This flexibility is partially exploited, in the sense that it permits early arrival of ‘red eye’ international and intercontinental services or departure of services requiring an early start. For example it is evident from the chart below for a typical day (Thursday 28-Apr-2016) that the second peakiest of the four peak hours is 0600-0700, when all activity is geared towards departures.

While the balance between arriving and departing passengers (the actual measure here is seat capacity) is fairly equal, there are occasions when it gets out of kilter. On the other hand, there is not such a degree of peakiness that further long haul services would find it difficult to operate. (Christchurch is the only other airport apart from Auckland that is capable of handling Boeing 777 and Boeing 747 aircraft in regular service).

CIA seats per hour total system, all airlines, all terminals, all origins/destinations, typical day: Thursday 28-Apr-2016

Despite the presence of long haul services, seat availability is distributed mainly in favour of flights of up to two hours’ duration. The total cumulative percentage of seat availability on flights in excess of four hours is only 3.8%.

CIA seats by length of flight (system), 25-Apr-2016 to 01-May-2016

In no uncertain terms the final chart in this section shows the intense focus on flights – and frequencies – within a short timeframe of up to 3.5 hours.

CIA frequencies (system), 25-Apr-2016 to 01-May-2016

Terminals and construction

Much of the infrastructure at CIA is in place.

The airport has two runways perpendicular to each other: a 3288 m primary runway (02/20) orientated with the north-easterly and south-westerly prevailing winds, and a 1741 m secondary runway (11/29) orientated for use during ‘nor’westers.’ The airport also has a third grass runway parallel to the primary runway, for use by general aviation.

Owing to increasing passenger numbers the airport has completed construction of a major terminal upgrade. The new construction’s primary wing opened in 2011 and the upgrade was completed in 2013 replacing the old domestic terminal and international check-in and the baggage handling infrastructure. The cost was NZD237 million (USD200 million). At the same time the airport changed its branding from Christchurch International Airport to Christchurch Airport, though it is still known internationally by its former name and the low-key rebranding may not have been as successful as hoped for.

According to the CAPA Airport Construction Database there is no significant construction activity at present. There is some maintenance work taking place on the north-south runway that is scheduled to complete soon. Otherwise, most of the activity has been in the development of the NZD25 million (USD21 million) Spitfire Square retail development of 17 stores.

The airport company will build a new Novotel hotel with 200 rooms on campus by the main terminal, to open at the end of 2017.

CIA has a 10 year strategic plan which is intended to enable it to grow its position, functioning on ‘innovation.’ This suggests that further construction activities are not required in the short- to mid-term, despite significant traffic increases recently.

Both locally and nationally there has been criticism of Wellington Airport’s proposal to extend its runway at a cost of NZD300 million (USD240 million). This criticism has been on the basis that “the probability of them [airlines] commercially wanting to fly a lot more flights out of Wellington is limited because they can already fly people to Auckland and Christchurch at reduced costs”, according to the Prime Minister, John Key.

Ownership – staying in the public sector

Christchurch International Airport Limited was established in 1988 as a company owned 75% by the Christchurch City Council and 25% by the New Zealand Government. Thus far it has avoided being lured into any form of privatisation, unlike Auckland Airport (Auckland City Council, Manukau City Council and publicly listed shares) and Wellington Airport (Wellington City Council/Infratil).

There have been several proposals that the airport should be sold in order to help out a cash-strapped council, but there is considerable resistance to those proposals.

Recently released financials for 2H2015 show tourism driving half-yearly profit up by 63.6% to NZD16.2 million, on a revenue increase of 12.2%.

Queenstown the beneficiary of Christchurch’s exposure to earthquakes

As mentioned previously, Christchurch remains heavily impacted from the earthquakes and attracting tourists back there is a challenge. Prospective intercontinental airlines may still be hesitant to go into Christchurch for the moment.

Queenstown Airport is taking advantage of this scenario and has grown significantly as an up-and-coming rival to be the gateway to the South Island. It is New Zealand’s fourth busiest airport.

Queenstown Airport serves the city of Queenstown, about 400 km southwest of Christchurch. The surrounding region is a popular adventure tourism destination, with some of New Zealand’s best ski fields, facilities for mountain biking and hiking locations. The airport commonly sees an influx in international traffic during the winter months, but is also experiencing growth in the summer as LCCs expand to/from the airport. New Zealand’s second-busiest airport by aircraft movements, Queenstown is served by Air New Zealand, Qantas, Jetstar, and Virgin Australia.

Traffic has been growing steadily in recent years, by 8.3% between 2013 and 2014 and by 14.3% between 2014 and 2015, compared with +3.5%/+5.4% at Christchurch. While traffic statistics are at the same level as 2008/9 international passengers have doubled in number.

Queenstown Airport annual – Passenger numbers

In Jun-2015, the airport opened a new international terminal and turned to its next initiative – to introduce evening flights by winter 2016. Evening flights will allow the airport to expand its capacity further without building additional terminal infrastructure in the short term and take advantage of its full consented operational hours between 06:00 and 22:00, moving from an approximate 8-hour operating window during the winter peak to a 16-hour operating window. Air New Zealand operated the first evening flight into Queenstown Airport on 30-Apr-2016 in preparation for scheduled services commencing on 23-May-2016.

There are two issues that mitigate against Queenstown establishing itself as the primary airport for the South Island

There are two issues that mitigate against Queenstown establishing itself as the primary airport for the South Island. Firstly, it cannot handle wide body/long-haul services, so it is restricted to visitors arriving from other points in New Zealand or from Australia. There are however transfer agreements in place such as the North Asia Alliance Agreement between Air New Zealand and Cathay Pacific, which has been extended through until Oct-2019.

Secondly, tourism accounts for much of its traffic. It is not a primary commercial centre as Christchurch is.

So Queenstown is and will remain a challenge for Christchurch in the future though not one that is insurmountable as long as the Canterbury region avoids more earthquake events.

Summary & Conclusions

  • New Zealand is a remote country and Christchurch is yet more ‘remote’, in the sense of distant, than Auckland or Wellington. Being located at the end of the world must impact on connectivity. In some directions there is nowhere to go.
  • The government has transformed New Zealand from an agrarian economy to a more industrialised, free market economy that can compete globally. However, the economy in and around Christchurch is still based on agriculture, although supplemented by light industry and CIT businesses that enable it to stand alone.
  • The tourism market remains dominated by inbound from Australia but is swinging slowly in favour of North Asian countries. Visitor numbers continue to grow steadily.
  • Christchurch remains in recovery mode after a series of large earthquakes in 2010 and 2011 and the airport has played a large part in supporting that recovery.
  • Overall, Christchurch has a greater aviation impact as measured by various metrics than does the capital city airport, Wellington. For example, the number of routes is the same and it hosts more international airlines operating there.
  • Seat capacity has been growing by an average of 5% in the last two years, with traffic growth slightly beating that figure in 2015.
  • Christchurch airport serves a very wide variety of domestic routes and Air New Zealand has the lion’s share of capacity at the airport.
  • Intercontinental airlines play an important role, but the sum of their seat capacity is only 7%.
  • There is a lack of direct air services to both Europe and North America but such services would be impractical in the current economic climate, and when many destinations can be accessed indirectly through mid-distance hubs.
  • In terms of the impact of low cost airlines there is nothing to differentiate Christchurch from Auckland or Wellington airports.
  • Because of Air New Zealand’s membership, Star Alliance is the dominant alliance.
  • The balance between domestic and international cargo capacity is a fine one.
  • There is no curfew at the airport and there are opportunities for other long haul services to operate if economically justifiable.
  • Most flights and frequencies are condensed into a time frame up to three hours.
  • For the time being most of the infrastructure is in place; construction activities are limited to retail development and runway maintenance. However, CIA has a 10 year strategic plan which is intended to enable it to grow its position, functioning on ‘innovation’.
  • The airport is in public ownership and looks set to stay that way
  • Queenstown Airport, at the centre of a flourishing tourist trade, presents a challenge to Christchurch Airport.

SUBMISSION BY THE GUARDIANS OF THE BAYS ON THE WCC LOW CARBON PLAN

Dr Sea Rotmann, May 3, 2016

It is good to see vision for a Low Carbon capital, with planning that will increase cycle-ways, electric charging stations, higher density building, ongoing smart energy challenges and phasing out minimum parking requirement. We like the statement “acting to reduce emissions helps the city as a whole” on page 6. However, this unfortunately cannot be taken as a serious statement with the airport and aviation emissions only being mentioned once in the plan on page 10: “On the other hand, we have a major international airport within the city limits, so we are credited with the emissions of nearly all of the region’s domestic air travel. This creates multiple complex challenges – with less forestry we aren’t able to offset as much; and with aviation being a substantial contributor to our transport emissions, greenhouse gas reductions will be driven by the availability of international solutions for aviation such as biofuels or gains in aircraft efficiency.”

Waiting for international solutions for aviation and not counting our international aviation emissions as part of the city’s emissions profile, as well as supporting the extension of the runway to double flights (including long-haul international flights) by 2030, is highly disingenuous. According to Adam Voulstaker’s numbers (https://guardiansofthebays.org.nz/re-blog-adam-voulstaker-desolation-of-smog/):

 Nearly a quarter of all CO2 emissions in Wellington are from the airport according to a URS council commissioned report – this is not mentioned in the plan.

 Domestic Aviation emissions have increased 50% in Wellington from 2001, almost equal to petrol emissions.

When setting emission targets we need to keep mindful of:

  1. If we don’t meet said targets, we will get further behind, and the damage to infrastructure, roads, seawalls, and coastline property will require further Council funds and no doubt fossil fuel construction emissions to repair. Hence, the targets are only realistic if we stick to them every year.
  2. The changing situation (as outlined by scientific consensus) and the need to adjust our targets if changing climate and sea-level rise predictions worsen.

With this in mind I would like to recommend the following action points from WCC:

  • Adoption of a reliable means of being accountable for set targets, preferably carried out by a non WCC expert body, with a meaningful system of addressing failure to reach targets. This is to help ensure WCC doesn’t continues miss it’s targets as occurred 2013, when the target of 3% reduction resulted in a 1.5% increase in emissions (p.15 Draft Annual Plan). Investigation of why this occurred needs to be undertaken, and addressed. And this excludes counting aviation emissions properly, which would have increased the % of missed targets.
  • Given the accelerated climate change we are currently seeing, all targets should be checked with scientific experts, and the 2020 target is dubious. WCC have changed the base year to 2014/15 (previously 2003). This seemingly is used to justifiy a change from the original 40% 2020 target to the new 10-15% 2020 reduction. However, emissions only dropped by 1.8% between 2000/01 and 2014/15, so we have 4 years to make up the 38.2% reduction to meet the 40% target that was set. So let’s target 38.2% reduction by 2020.
  • Emissions need to be honest so inclusion of International aviation (and agriculture) are essential. Domestic aviation was 17.5% of emissions (2010) and 19% (2015), but didn’t include international, which rose by 11% in 2015/16. We are told there is no data, so let’s get some before supporting the runway extension to attract more long-haul, international flights.
  • A team of people dedicated to working with the community to provide accurate data, and positive options for Wellingtonians to contribute at a personal, local and national level to slow the rate of climate change. People need to be assisted to move from a mindset of unfettered consumerism and waste production, toward the real environmental cost of purchases, activities and waste. Making a difference to the transport emissions will only happen if there is an urgent change in people’s attitudes, expectations and behavior. An example may be a move toward more skype conferences rather than air travel where travelling is not essential.
  • WCC to fully commit to divesting from fossil fuels in their own investment portfolio, in order to take a stand against fossil fuel exploration and extraction. The books of fossil fuel companies already have 5 times the amount of fossil fuels capable of raising the global temperature by the critical two degrees. Dunedin City Council has already made the commitment to this, and we understand is currently being considered by Auckland Council. This may mean breaking some of its cozy relationship with Infratil and its various fossil fuel-dependent subsidiaries such as NZ Bus and the Wellington International Airport.
  • Relinquish the airport extension plan as it runs counter to reducing emissions. No figures have been provided to back up the notion that somehow this plan will reduce emissions, but there are projected figures that indicate the opposite (2014 URS greenhouse gas report). If you add international flights but don’t decrease domestic how does that result in decreased emissions. Surely overseas visitors will wish to visit Christchurch or other centres whilst holidaying here. We should be encouraging people to begin reducing their air-travel not making it easier for them. Air travel is usually the largest emission source for the individual if they make one overseas flight to London equivalent per year.
  • The climate change initiatives must not work in isolation, but be supported by other arms/policies of council. The airport runway extension team, for instance, need to be working with the climate change team. See P13: “Action on climate change mitigation and adaptation makes sense economically as well as environmentally”.
  • Further thought also needs to be given to the needs for adaptation. How is coastal-lying infrastructure and residents being prepared for future changes? How resilient and sustainable is this airport where it is currently located?

Ian Harrison, a highly respected  Principal economist from Tailrisk Economics, has released a truly independent (i.e. not paid for or commissioned by any Party involved in the runway extension) review of the Cost-Benefit Analysis. It really is worth a read.

To quote from his Executive Summary:

Recently, the Wellington International Airport Company released a cost benefit analysis of the airport long-haul capability extension proposal that purports to show that the economic benefits are $2,090 million, and are 6.8 times the capital cost. However, the benefits appear to be substantially overstated and are driven by projections of long-haul passenger numbers that are not credible, and favourable assumptions that boost the subsequent benefits for New Zealand. In critical markets high growth rates have been trended forward without regard to convergence to higher income country norms, and no regard has been given to the prospect of global warming policy initiatives designed to slow air traffic growth.

A more realistic assessment of the project would show much lower and possibly negative net benefits.

It appears that one of the purposes of the report is to make a case for central and local funding of the airport extension. Putting in public money to secure benefits of $2,090 million for New Zealand seems like a good deal. However, the case for a public subsidy is not made. If the airport is as successful in attracting long-haul flights as the report claims, then the extension will be a commercially viable investment. There is no need for a government or local authority subsidy.
Please read the rest of the report here.
This report, together with Michael Reddell’s (former reserve bank economist) excellent analyses here, here and here, Keith Johnson’s (transport economist) scathing blogs here and here, Brian Easton’s devastating put-down of the ‘Think Big’ mentality applied by Sapere and the NZIER peer review that we will see early in the new year, make some very compelling arguments that the proponents of the extension, especially the Mayoral candidates that keep repeating these overblown numbers as if they are fact, should read. Their credibility is seriously on the line seeing they seem hell-bent to give public hand-outs to a private company which amounts to little more than a rort.

We dug up the second arrangement between the Council and the airport, where the Council agreed to fund the airport with an extra $1.95m towards fast-tracking the runway extension through a board of inquiry process. It’s a fascinating read, especially when you look at how badly the airport misjudged the initial costings and how it is getting the Council to co-fund its EPA process as well, even though it says this will be at the ‘cost of the applicant’. Hmmm. Another great insight is the Council’s own peer-review of the two airport reports (EY economic impact statement reviewed by PwC and INTERVista long-haul demand report reviewed by AirBiz). Even though they are summarised as ‘supporting the logic, methodology and process used by the WIAL reports’ when you actually read through them you find some very interesting caveats and cautions. For example:

  • the passenger catchment area of 1.1 million people has been hugely overblown. Instead of the claimed 472,000 passengers that demand long-haul flights out of Wellington it is only 104,000! A quote from Price Waterhouse Cooper for the City Council: “PwC advises WCC that the potential to realise the benefits claimed in the EY report become progressively less certain the further the catchment is drawn”
  • the EY report also identified the Asian region as the one with the most demand from Wellington travellers, however it is Australia (by far!) then the UK and US that attract most long-haul travellers. Another quote: “This means that for the current domestic demand the runway extension for Asian travel is not priority”
  • Then there was of course the hoary old chestnut in the EY report that ‘direct services to Wellington will impact the choice of city that international students make when deciding on which University to go to’. Unsurprisingly PwC found that “the quality of education/course/institution is the most significant contributing factor for international students” etc.

We are almost certain that the airport’s claim that NIWAs environmental marine assessment report shows that there will be ‘no sediment runoff, no impact on the water column, it is not an ecologically significant site and no habitat for endangered animals’ is also misquoted and overblown. It will be interesting to pick apart their reports when they are finally released to the public (when??), and match the actual analysis to their spin and half-truths…

 

We have gone through the trouble of looking at all 1049 formal LTP submissions. By searching for the term ‘airport’, we have identified over 100 submitters that specifically mentioned the runway extension proposal and have summarised their views in this document. It is very interesting to note that 87 submitters (>81%) were strongly opposed, with only 20 being for the runway extension. More interesting is that the opposition was largely made up of long, strong arguments against it (49 pages) whereas the proponents only used 9 pages to describe their reasoning, of which 7 were from the WIAL (airport) submission. Almost all others had significant caveats (highlighted in red), including the Chamber of Commerce, Property Council, Port Nicholson Trust, Ernst & Young, Deloittes and Kensington Swan. All progressive associations that submitted on this topic were against it. It is quite obvious that the Council did not make a similar analysis when reporting on the supposed support of their big 8 projects in the LTP!

LTP Submissions Summary

Here was the online ‘consultation’ of the WCC for the runway extension as proposed in the LTP. This did not find its way into being considered an official submission, not that that was made clear to the submitters. It is very interesting to read the comments, pro and con as it becomes clear that the people who went online to vote for it, mainly give short statements like “Just get it done’ whereas the people who voted against it give long and considered reasons why they oppose it. It also needs to be noted that the question the Council asked in the LTP was highly disingenuous – ‘Do you support better air connectivity?’ is very different to ‘Do you support a $300m runway extension without a business case, plan or committed airline?’.

This is the final LTP, after considerable submissions against the runway extension have been heard and received. Some major caveats have been added to the ring-fenced $90m for the runway extension:

The LTP now says that the Council will make a final decision on this project and whether to commit funding to construction once:

  • WIAL has obtained resource consent for the project
  • The Council has received and considered a cost-benefit analysis and business case from WIAL
    • that will be independently reviewed.

Other key considerations that the Council has said will need to be considered before it makes its final decision relate to:

  • The resilience of a runway extension to weather and climate change
  • The proposed investment vehicle and any revenue agreement
  • Satisfactory airline commitments
  • Funding arrangements for construction and confirmed construction costs
  • The governance and management structure to oversee construction.

The Council has also said it will undertake further public consultation before making a final decision on whether to commit funding to construct the runway extension.