Airport's upgrade entails new name

Hawke's Bay Airport will be getting a new name.

Hawke's Bay Airport is getting a $5 million terminal upgrade and a new name - Ahuriri Airport Hawke's Bay.

The planned name change is revealed in the airport's latest report to its shareholders and was prompted by a request from local treaty claimant group Mana Ahuriri Incorporated.

"Together with airport company shareholders Napier City Council and Hastings District Council, the company's directors confirmed their support for Mana Ahuriri's request for a change in the airport's name to Ahuriri Airport Hawke's Bay," chairman Tony Porter said in the report.

"The company is considering the implications prior to developing an implementation plan."

While Ahuriri is the Maori name for Napier, the MAI group represents seven hapu based across Napier, Hastings and the rural area west of the two cities.

The Napier and Hastings councils own 26 per cent and 24 per cent of the airport respectively, with the other 50 per cent owned by the Crown.

The airport company said last year it was planning to upgrade the terminal to cope with growing passenger numbers.

A record 456,000 passengers passed through the facility during the last financial year and that number is predicted to grow to 509,000 in the 2017-18 year.

In its shareholder report, the company says planning for the terminal upgrade has been a priority over recent months, with the focus on developing a business case for the project.

"The company began a consultation process with its most significant customer, Air New Zealand, to determine the airline's requirements for the terminal building over the planning period," the report says.

A key factor in forecast passenger number growth has been Air New Zealand's decision to fly larger planes in and out of the region.

Over the past few months the airline has replaced 50-seat Q300 aircraft with 68-seat ATRs on the routes it runs between Hawke's Bay and Auckland, Wellington and Christchurch.

Last year the airport company said as well as dealing with more passengers, the upgrade would aim to make the terminal a place where travellers felt comfortable spending more time - and hopefully more money on food and retail services in the building.

In its draft statement of intent for the year to June 30, 2016, Hawke's Bay Airport Limited says it plans to spend $2.5 million on the terminal redevelopment in the 2015-16 financial year, followed by a further $2.595 million on the project in 2016-17.

Its other major planned capital expenditure is $1.5 million on land development during 2016-17.

In the draft statement of intent, the company says despite the "likely scale of development and therefore demands on capital" over the next three years, it expects to pay its three shareholders dividends averaging 40 per cent of net profits.

Those profits are forecast to be between $1.3 million and $1.5 million each year.