Christchurch Airport's Malcolm Johns talks to Fran O'Sullivan at the US Business Summit. Photo / Supplied
War-gaming business risks such as a potential rupture of the Alpine Fault in the South Island sparked the team at Christchurch International Airport (CIAL) to embark on fundamental changes.
A pandemic is one order of risk.
But if the Alpine fault goes, this could leave Christchurch without genuine mains power for six months.
If the Southern hydro lakes system is damaged, the upshot would be a national power issue.
CIAL chief executive Malcolm Johns relates that the airport has backup diesel generators.
But after the 2011 earthquake, damage at the Lyttelton port meant fuel couldn't easily get in.
"Aircraft can fuel up in Auckland and fly down and back without needing to refuel but we still need an electricity system to be standalone.
"So, we started looking at it."
The upshot is the planned development of a huge solar panel installation covering 400ha, called Kowhai Park, which will ultimately cover 900ha.
"We can run the essential part of the system off diesel generators. But the nexus of Kowhai Park was thinking about energy and the alpine fault," says Johns.
The Kowhai Park plan sprung from CIAL's strategy to prepare for another major event. But it is also part of the airport's world-leading sustainability story.
When the Prime Minister slapped New Zealand into its first Covid lockdown in March 2020, the CIAL team was prepared. They had been war-gaming for several years, preparing plans in case another catastrophic event hit the Southern city.
If the February 2011 Christchurch earthquake had taught Johns one thing: it was to be prepared.
The rupture of the South Island's Alpine Fault was an obvious risk. So too, a virus borne pandemic arriving via infected airline passengers passing through the Southern airport gateway.
Johns took up the reins as chief executive at CIAL in 2014; three years after the earthquake wrought a devastating impact on the southern city, killing 185 people.
Christchurch's central city and eastern suburbs were badly affected, with damage to buildings and infrastructure already weakened by the magnitude 7.1 Canterbury earthquake of 4 September 2010.
But the airport stayed open.
It was not built on land subject to liquefaction and the special asphalt tarmac simply flexed with the shocks.
Reflecting on the impact of Covid-19, Johns says it has been a significant shock to New Zealand economically and socially, and it has significantly impacted aviation.
"Christchurch Airport was better positioned than most to weather the pandemic," he says.
"We had already adjusted to a difficult aviation market post-earthquakes and had diversified the business.
"We had the balance sheet and the experience to be able to look through Covid and continue to plan for the future."
The company started that work in 2014/2015.
Johns told the Herald: "What we learnt through the earthquake was that when businesses get disrupted they fall into three groups."
One group would simply go out of business: "Generally they had problems before the earthquake occurred."
Another group was concerned about shareholder primacy.
"They shed staff and hunker down preserving their assets and shareholder value.
"They are generally the businesses that restart last. They've made the decision to go into hibernation in essence."
The group that was most important to CIAL were those who moved into a restart mode.
"They preserve their staff and their stock to restart business very quickly. "One of the challenges was these businesses burn cash, but they are the most important group because when you come out of a lockdown they are the ones that will start operating first.
"So what we learnt through the earthquakes is they're the group we have to work out how to support."
CIAL offered such customers a rent deferral option, using its balance sheet to provide mezzanine financing.
Other parts of the airport's campus benefited. "We knew in the pandemic that passenger revenue would disappear, " said Johns. "But we were ready for freight and supporting that in and out of the country."
Sustainability journey
The airport has championed sustainability, in particular climate change, since 2005.
Under Johns' watch it has executed a programme that has removed 90 per cent of scope 1 CO2e and 20 per cent of scope 2 CO2e from its business and was the first airport in the world to be independently audited and accredited with the highest level of airport decarbonisation by the World Airport Council.
His company's journey to be the first airport in the world certified as climate-positive has seen it become a beacon for much bigger airports like New York's LaGuardia, which is not so far along its sustainability journey.
The CIAL team is now involved in writing global standards for the decarbonisation of airports.
Johns is chuffed that Climate Change Commission chair Rodd Carr has nominated the airport as one of the reference companies for the Net-Zero Emissions Expert Group set up by United Nations Secretary-General Antonio Guterres.
"As one of the southern-most international airports in the world this is a pretty outstanding position to be in," he says.
He has assembled a talented team.
Claire Waghorn, who leads the sustainability transition programme at the airport earlier worked as a research analyst for the Green Party Aotearoa New Zealand.
"She worked for Climate Minister James Shaw," said Johns, who persuaded Waghorn to leave the political policy arena and come and work where "she could make the biggest impact" by leading climate emissions reductions at the airport.
"She copped a lot of flak but she is making a big impact."
The company's milestones on its sustainability journey are laid out in the adjoining article on this page.
Johns also serves as one of New Zealand's three delegates to the Apec Business Council (Abac) where he leads the climate working group.
He recalls sitting in an Abac meeting in Vancouver earlier this year where business representatives were talking about reaching carbon neutrality in 2030 and "we are carbon positive this year".
"When we think about the legacy we can make for today and the future it includes leading the transition for a low carbon economy and ensuring we understand what our world could look like in 10 years."
• In December 2020, Christchurch International Airport became the first airport in the world to demonstrate the highest level of accreditation for carbon reduction. The first step was to reduce the airport's impact as much as possible, by removing type-1 and type-2 emissions and waste.
The company then looked to spread its impact and be a catalyst for the low-carbon transition.
Airport executives now coach other airports on how to follow its lead (including New York's JFK, Newark Liberty and LaGuardia.
• Hamburg International Airport reached out when Christchurch Airport was recognised as the first in the world to demonstrate the highest level of airport decarbonisation.
The airport is the European leader in applying hydrogen within airport operations and works with Airbus to assist the transition of aviation to more sustainable energy.
The two airports now work together with regular meetings in the wee small hours to combine their knowledge and accelerate adaptation.
• Christchurch Airport also works with and coaches Bristol Airport (which has the goal of being the UK's most sustainable airport), the Irish Airports Group, Perth and Brisbane Airports.
• Kōwhai Park will be New Zealand's largest solar park. It was announced on December 1, 2021, and is an example of how Christchurch Airport can lead the transition to a low-carbon future. It has attracted significant inquiry from several national and international companies. Kowhai Park will generate renewable energy that will underpin Canterbury's transition to low carbon industry and transport and will allow the airport to work with its ground and Air transport partners to introduce new low-carbon technologies.
• Electric aviation — NZ's first electric aircraft is based at Christchurch Airport. The company expects there to be domestic electric aviation by 2030 and has supported a number of trials of autonomous electric flying vehicles and Sounds Air's planned introduction of electric aircraft.
While the future technologies are not yet locked in the airport is planning for a future where aircraft need electric or hydrogen energy and infrastructure and where intra-regional flying transport may be a reality. It wants to plan so that it is ready to support new technology.
• As a trading nation far from the market, and with carbon caps a feature of New Zealand's future economy, Christchurch Airport is already considering foreign exchange earnt vs CO2 emissions.
Airports support high foreign exchange earnings with lower CO2 emissions. As New Zealand embraces carbon budgeting the airport wants to embrace a discussion on the highest and best use of CO2e under those budgets.
• Capturing the lessons for future generations is also important to the company. In 2021, it commissioned an independent researcher to review its sustainability journey and whether the airport "walked its talk". Dr Piers Locke's report can be found here.
• Digitisation has us at the forefront of understanding the role of digital
technology in our business. In 2019, Christchurch Airport launched New Zealand's first autonomous shuttle, followed by the development of a virtual fire fighting training application, and the launch of humanoid robots to add to customer service in the terminal.
• The airport's Alibaba programme is also an important example of the airport working to position itself for the digital future.
The partnership with Alibaba allows it to market products to travellers once they get home. It appreciates that the future will see a combination of digital and physical retail and experience and partnerships between platform and product.
• The airport's Central Otago airport project is what it says is an example of intergenerational thinking aligned to population shifts caused by the future of work.
Central Otago is, and will continue to be a popular place to live, work and visit.
Existing airports will not have the capacity to meet long-term passenger and freight demand in the region. By meeting future demand efficiently Christchurch Airport aims to minimise carbon and congestion impacts while maximising the economic and social benefits of growth.
There has been some pushback locally, but Christchurch Airport maintains the time to think about the expansion is now, given Statistics NZ forecasts show the population of the
Central Otago region is projected to grow to the same size as Dunedin over the next 25 years. More than half that growth will occur outside Queenstown.
A well-located future-proofed airport would create new and exciting opportunities for the region as NZ transitions to a low-carbon environment, Christchurch Airport says.
OPINION: Tensions are likely to become more evident next year.