Airport to signal what lies ahead

Don Huse says the knack of running an airport is to work out exactly when to spend money on new developments. Picture / Martin Sykes

Auckland International Airport will tomorrow unveil its grand vision for the next 20 years - with plans for new terminals, runway, hotels, carparks and commercial property developments.

Chief executive Don Huse has often said the knack of running an airport is to work out exactly when to spend money on new developments - not too early as to waste money and not too late to mean congestion and backlogs.

The plan is not thought to include any surprises or actual capital expenditure figures for the different developments, but will be something of a strategic overview of where the company is planning expansion in the next two decades.

It has been put together after consultation with the airlines and is based on tourist arrival projections. Any commitment to new developments will have to wait for airport management to decide when the time is right.

The master plan builds on previous work done by planners since the airport first opened for international flights in the mid-1960s.

Blueprints for a new runway, terminals, commercial property developments, hotels and carparking have been continuously updated and refined.

But a continued growth in visitor numbers, new aircraft technology and airline demands mean the airport company must have its long-term strategies planned well in advance.

The airport has been a cash cow for its shareholders since privatisation, with high dividends and capital returns.

Its share price over the past year has ranged from a high of $2.41 in April last year to a low of $1.79 in December. It closed down 1c yesterday at $1.93.

The company is in the midst of pricing negotiations with its airline customers, with new landing charges due for introduction next year.

But the slowing of growth in passenger numbers has caused the company to put the brakes on some of its more aggressive expansion plans.

Development of a second pier - where planes pull up to the gates - has been put on hold.

But plans to improve the Air New Zealand domestic terminal are going ahead.

A plan to expand the international terminal's arrival area was unveiled last month, after the company accepted there had been "significant bottlenecks" in dealing with arriving passengers. Designed for 1400 passengers an hour, it is now handling 1900.

Costing $100 million, the expansion is due for completion in December next year.

Land next to the international terminal has been earmarked for a four-to-five-star hotel, and a site nearer the domestic terminal on Tom Pearce Drive has been selected for a budget hotel such as the Formule 1 brand of international hotel chain Accor.

Accor has been aggressively expanding its Formule 1 brand across Australia with a focus on airports.

Of the airport's $282 million revenue last year, $152 million came from "non- aeronautical" sources, including carparks, retail shops and property rentals.

Developments in these areas will be particularly important, as it becomes increasingly difficult to prise money from airline customers struggling with the burden of soaring fuel prices.

A second runway is one of the biggest and most expensive items on the drawing board. It can be built in stages, initially being used for only the smaller, propeller-driven aircraft.

Smaller planes sharing a runway with bigger, wide-bodied jets can be logistically challenging, with "wake turbulence" caused by the big planes posing a danger to the small ones.

But the second runway for just smaller planes could prove unpopular with the airlines, who would not want to split domestic operations between two terminals.

This week, the airport announced a deal with US logistics company Expeditors International to build a $6 million office and warehouse complex.

Construction of the 5000sq m warehouse and 400sq m office facility should be completed by December.

MASTER PLAN

* Auckland International Airport will tomorrow publish a 20-year vision for the airport.

* It will pull together previously released plans for a new runway, hotels and terminals.

* Commercial property development around the airport is also an important part of future planning.

* More than half the company's revenue comes from "non-aeronautical" activities, such as carparking, terminal shopping and property rentals.