KEY POINTS:
From January 8 domestic passengers passing through Hamilton's revamped airport will have to pay $5 for the privilege of leaving the Waikato by plane, but the decision is understood to be going down like a lead balloon among Air New Zealand executives.
The departure tax will be forced on about 155,000 domestic passengers annually, and is expected to raise $600,000.
Airline crews and children under the age of five will be exempt from having to pay.
Waikato Regional Airport chairman Jerry Rickman said the "development levy" was necessary to cover the interest costs associated with the new terminal's $15.5 million capital expenditure programme.
Of that amount, $10.5 million was directly attributable to domestic requirements, with around $800,000 needed to service the debt.
The remaining amount is understood to be attributable to the international terminal.
"We are not happy," Air New Zealand spokeswoman Pam Wong said. "Furthermore, we have issues with the integrity of the process they have followed. We provided some feedback to them [during consultation] which appears to have fallen on deaf ears."
The airline had offered to fund some of the charges, but the airport had not bothered to discuss the idea, Ms Wong said. The airport had shown a "lack of courtesy" in the way it had handled the entire issue.
"The first we heard about how it was going ahead was through the media."
Several weeks ago Air New Zealand group general manager Norm Thompson called the idea of the charge a "rip-off."
He said the proposal was unjustified and simply a convenient way to fund expensive "cosmetic changes" to the airport's terminal.
Originally, the cost of the terminal upgrade was set at $11.55 million, but because of increased demand for labour and materials the price ballooned by $4 million.
Domestic travellers arriving at the airport have traditionally been forced to stand outdoors in all kinds of weather, waiting for their baggage to be delivered by way of tractor and trailer units.
The airport's investment includes a new baggage carousel, meaning bags will be able to be picked up in more comfortable and convenient surroundings.
The new terminal will provide for 6588sq m of floorspace, an increase of nearly 60 per cent.
Mr Rickman said the decision on a departure tax followed similar charges at other provincial airports, such as Palmerston North, Rotorua, and Queenstown (where the airport receives development recoveries from Air New Zealand charges).
International travellers leaving via Freedom Air to Australian destinations currently pay a $25 departure tax, with children 12 and under leaving the airport without charge.
Meanwhile, Mr Rickman said the airport was proceeding with a review of aeronautical and terminal charges, which have remained unchanged for 12 years.
Hamilton Airport's chief executive, Chris Doak, is also putting together a business case that will assess the viability of a runway extension.
When the capital expenditure project was first announced early in 2004, the airport said the runway would be extended from its present 1900m to 2500m, with the potential to go to 2720m.
It was initially hoped this would happen by next year, but those plans had been shelved.
Mr Doak yesterday declined to put a timeline on when the feasibility study and runway decision would be complete.
"We are conducting a survey of the export sector to understand who is moving what, to where, and how often. That will be a key input to the business case.
"We are still assessing the regional demand for regional freight. We'll finalise the survey early next year."
Funding for the runway's future expansion was expected to come in the form of land sales. The airport company - owned by five local body councils including Hamilton City - owns about 100ha of surrounding land.
It will apply to Waipa District Council to have the area rezoned from rural to commercial and industrial early next year.
Mr Doak said that although there was a "groundswell of support and enthusiasm" for the runway extension, turning that into solid commitments from a large number of freight importers and exporters was the true test.
