Auckland Airport chief executive Adrian Littlewood says a vaccine-supported recovery in transtasman travel will give the company confidence to press go on its newly configured infrastructure programme.
Key in that is a new domestic jet hub which will be integrated with the eastern end of the existing international terminal building and deliver a much better passenger experience, he says.
Although the airport's crucial transtasman business has again been hit by a pause in quarantine-free travel, Littlewood said if it recovered to around 60 per cent of pre-pandemic levels the company would green light more than $1 billion on the new domestic terminal and other projects.
''If we can see our way back to 60 per cent recovery on Tasman alone that's what we need to keep going and it's not hard to imagine that in the future once vaccine rates are going up,'' Littlewood told the Herald.
''We don't depend on getting back to 2019 in terms of international - a modest recovery on Tasman is all we need to continue to fund our investment right across the business.''
In the meantime the airport would launch demolition and other work to prepare for the domestic hub that would take about five years to build. The project would be funded by passenger levies but these wouldn't be charged until the project was complete, said Littlewood.
''These projects have very long lead times. We're trying to look through the current uncertainty and the vaccine programme rollout gives us a bit of comfort and we can see a path out of here.''
Initial work to prepare for the jet hub would cost $30 million and start early next year.
Auckland Airport shelved plans for a second runway and other infrastructure work as international travel collapsed. The new integrated domestic terminal was envisaged before the pandemic hit and has needed buy-in from airlines.
The new domestic operation will be around three times the size of the current domestic terminal, when accounting for shared check-in (kiosk-based) for both international and domestic travellers. It will include large, light-filled dwell spaces with views across the airfield to the Manukau Harbour and expanded contiguous security screening.
"We haven't wasted a day since the outbreak of Covid-19, using the time to plan ahead and develop a refreshed pathway for future infrastructure that is realistic, prioritises the right projects and is carefully aligned with aviation's recovery," said Littlewood.
The domestic terminal opened more than 50 years ago, originally handling international passengers, and has been criticised for being outdated and cramped. The domestic hub will initially accommodate jet operations (aircraft flying to the main centres). Regional services would continue operating from the existing domestic terminal building and move across to the main terminal building later.
The construction of a new domestic facility closely integrated with the airport's international safe travel zone operations would provide a seamless journey between major New Zealand destinations and our global air connections.
"For Auckland-based travellers, a new transport hub with upgraded pedestrian, transport links, and car parking will offer a smooth connection into the terminal building," said Littlewood.
Advanced design work and signed construction contracts for a new domestic jet hub had been done prior to the outbreak of Covid-19, featuring a new pier, apron and airside dwell, food and beverage and retail spaces.
"Even though international passenger numbers are currently at historic lows it is important to set the wheels in motion now in preparation for aviation's recovery. Kiwis want a better domestic travel experience at Auckland Airport and that's what we're focused on delivering," he said.
The first stage of the project is expected to get under way in early 2022, relocating important back-of-house infrastructure that lies in the footprint of the planned domestic hub.
Littlewood said pre-pandemic the airport had around 30,000 people arriving and departing at the international terminal every day.
That's fallen by around 97 per cent or just about 1000 a day currently.
"We're taking advantage of the downturn where we can, demolishing and relocating operations and services to clear the domestic hub site, while bringing forward upgrades of core utilities critical to the functioning of the airport while passenger numbers are low."
The low-traffic environment has also allowed the airport to look again at and refine the original design and construction phasing to arrive at what it believed would be a better end result.
The first stage of work scheduled for early 2022 and costing around $30 million will include:
• Demolishing and relocating the legacy eastern baggage hall, livestock holding area, and waste disposal facilities
• Relocating key utilities, including the international terminal power centre and truck dock
• Relocating the operations control centre and emergency operations centre
• Carrying out ground, services, and technical investigations.
Littlewood said beyond demolition and enabling works the next major phase of development for the $1 billion-plus domestic hub would be determined by a range of factors including the speed of aviation's recovery.
"While our aeronautical development will be matched to the recovery of air travel, we are encouraged by the ramp-up in New Zealand's Covid-19 vaccination programme. It means that we can begin to look through the current situation and start to anticipate the recovery in air travel, and that is important for big infrastructure programmes, which are costly and take time to deliver.
"We probably have more certainty in our ability to plan now than we have had in the last 18 months since the pandemic began."
The airport would be working closely with its key partners on the new domestic facility, including airlines and government agencies.
"Our developments are very much built around other organisations also being able to deliver their services effectively and successfully, so they will be alongside us as we continue to advance the project."
Air New Zealand chief operating officer Carrie Hurihanganui said there had been many changes to the way people travel in the past 18 months .
"We are looking forward to working alongside Auckland Airport to ensure a more seamless travel experience for our customers.
"While the return of international travel is still some way off, it's important to continue to invest in improvements in infrastructure and services. By integrating a new domestic terminal into the existing international terminal, it will be easier for our customers to connect from domestic jet services to international flights, taking some of the stress out of international travel once borders open."
Board of Airline Representatives executive director Justin Tighe-Umbers said the integrated terminal would be a major leap forward for travellers and the airport alike.
Littlewood said the infrastructure programme was intentionally phased to allow the company to align development with aviation's recovery.
Auckland Airport's performance was strongly linked to international departures and arrivals, so the sustained recovery of transtasman travel would be a key milestone to guide the timing of the major construction stages.
"We've always expected construction will take five years to complete, and that view hasn't changed," said Littlewood.
A new transport hub is also planned for outside the existing international terminal, providing a new covered pick-up/drop-off area, valet services, and covered car parks connected to the terminal by an enclosed pedestrian bridge. The transport hub will accommodate both commercial and public transport options for travellers.
"We are really focused on making the journey for people travelling both within New Zealand and linking with international flights as efficient, fast and seamless as possible. This is a key factor in all our thinking," he said.
Before the outbreak of Covid-19, Auckland Airport had begun more than $2 billion of core aeronautical infrastructure projects with all eight "anchor projects" in either construction or feasibility and design.
The company is continuing with four anchor projects as part of its wider infrastructure programme:
• $160 million in upgrades to roading and new transit system (Northern Network and SH20B improvements)
•$1 billion-plus new domestic hub
• Approximately $200 million transport hub
• Around $75 million in ongoing upgrades to the existing domestic terminal.
Anchor projects that remain on hold are:
• Expanded international airfield and taxiway capacity
• New cargo precinct
• New international arrivals area
• Second runway.
Since March last year the airport had continued with more than $222m in core resilience and maintenance projects including $160m on roads and a new transit system, $37m replacement of runway slabs and pavement renewal and $7m renewal of airfield fuel lines.
The airline sold its last slots at Heathrow in 2020.