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Airport looks to have strong future growth

Last week Auckland Airport held an investor day which among other things provided some very useful information about what we can expect from the airport in the future. The presentation gives quite a lot of details around where some of the future growth will come from but for me the most interesting slide in the whole presentation is the image below which is in the section talking about the airports 30 year vision. It really helps to show just how important it is going to be to get some good transport options into the area.

Projected Growth

That is an absolutely massive increase in passenger numbers and so it’s no surprise when they say:

Growth means more pressure on land transport system

What’s more is that those passenger numbers don’t include the number of people who would be working in the terminal or in the surrounding commercial areas that will all need to get to and from work somehow. That is currently at around 20,000 people but will invariably increase as the airport continues to develop. To put things another way, 40 million passengers a year equates to an average of about 110,000 per day. Adding in the people working and the total travel demand in the area could be similar in total size to what the central city is today. That in itself is interesting as one of the slides talks about how the entire CBD could easily fit inside the Airport’s land holding.

Airport Land Holding vs CBD

With that sort of growth and the resulting travel demand it really does highlight how important it will be to get rail to the airport eventually. The Airport says that they have made an allowance for a station at the terminal however they are also saying that they won’t pay anything towards it and that it will have to be built by local and/or central government. To me there are some positives and negatives to that. Positives include that the airport shouldn’t be able to impose an extra terminal surcharge just for using the station – like what happens in Sydney. In addition timing is not likely to be tied to when the airport can afford its share. However negatively it means that all costs go to tax/ratepayers even though the Airport company will benefit greatly from the construction of it.

One other reason we can guess don’t want to help pay for a rail connection is that they are unlikely to want to damage their increasingly successful parking business. The presentation shows that in the last financial year revenues from parking increased strongly to $40.4m with it increasing not just because of more carparks but also improved revenue per space.

Airport parking revenue per space

They also say they are looking to add more than 1,100 carparks over the next year which will primarily be at their park n ride site although they are also changing some staff parking near the terminal to public parking

Airport parking capacity

The image below shows the current plan that is a part of their 30 year vision including the second runway to the north which they say will likely be needed in roughly 2025. It shows the intention to develop much of the land to the north of the airport and also to join the domestic and international terminals together into a single building.

Airport precint plan

On the single terminal they have released this image of what the terminal might eventually look like.

Airport terminal concept

I’m aware that they are current working on a master plan which will provide a lot more detail as to how the airport will develop and that it is due early next year. We will follow that development closely.

54 comments to Airport looks to have strong future growth

  • Have the airport factored what increased concern about climate change and carbon emissions will have on travel? If we are going to such a large increase in air traffic, we are going to have to make up for it by a massive increase in public transport, walking and cycling!

    • NCD

      Yikes- 10 million extra domestic trips averaging 1 hour and 150kg/hour/passenger (conservative) = 1.5 Megatons : a 10% increase in our total NZ transport emissions. (Leaving out the international flights, where the increase of 6 Megatons amounts to 40% of our current national transport emissions)
      Go clean green NZ, committed to doing our part to reduced greenhouse emissions!
      In their 125 page investor briefing (linked above) the words “carbon” “climate” and “greenhouse” all get zero mentions. Fail.

  • Pete g

    If nothing else, can they please build a concrete box underneth with space for 4 tracks to allow for fit out. Ideally directly under the terminal aka Heathrow T5 where you take the lift directly to check in, or from arrivals.

  • Jon Reeves

    We really need the rail line opened up now. 14.5 million is a large number of pax. Geneva airport handles a similar number of passengers and has and excellent station, dead end, served by about 6/10 trains per hour.

    Unlike Geneva, Auckland’s line has the advantage it would have a large number of passengers using it living in Mangere Bridge and Mangere Township PLUS the airport workers.

    Gerry Brownlee and the Natpack won’t like rail though. So a change of Govt. will be needed to get this project moving.

    • Frankone

      That is going to be a very large airport by international standards – Gatwick, Sydney etc have about 35-37m pax for example. Must be the impact of China – explains the change in signage! Pretty big jump in domestic flights also – guess most other countries have alternatives e.g. intercity rail etc. Pity they could not do something more unique with the terminal design though – guess better than the current setup…..

      • Yep impact from China is expected to be huge and shown the the presentation quite clearly

      • TheBigWheel

        Indeed.. China growth to 2040 exceeds total from all other countries combined by 2020. We should all be learning Chinese, or at least our children should.. like in Sweden http://www.ft.com/intl/cms/s/0/509d9a72-a7f3-11e0-afc2-00144feabdc0.html

        • Yeah and I remember all through the 80/early 90s at school where we were told that Japanese would be the big language and if we didnt know it we wouldnt get a job. Now there are no jobs in Japan and the Japanese are all furiously learning English.

          The most useful language to know business wise is English and it is unlikely to change for a long time yet. That is based on doing cross border M&A transactions all over Europe plus some deals with China, Israel and others.

          I am not saying that learning another language isnt a good idea (I am pretty good at a couple) but the idea that any one language will give you a massive advantage in employment later is flawed. Why not Spanish/Portuguese so the growing S American market can be targeted? Or Russian, Indonesian, Vietnamese, Thai? Who knows where China will be in 20 years time.

          • Greg N

            I did Japanese partly for that reason years ago, and what it mostly taught me was that (then) Japanese economic miracle of the 70′s, 80s and early 90′s was basically a mirage built on protectionism, government by fiat, government and banking sector collusion/corruption and easy credit causing a massive building boom.

            The chickens on that one came home to roost for Japan in the mid 90′s and have never left.

            I think the thinking back was that we would all be relegated to dealing with Japanese tourists flooding into NZ and they would expect everyone to speak their language.

            Hmm, does that sound familiar with todays thinking?

            I agree you should learn other cultures, but you don’t need to be a fluent speaker to do that though.

          • TheBigWheel

            There’s no doubt English is the most useful language internationally, especially for business. To the extent that, unless you live or work and do business in a non-English speaking country, for which purpose many of us have learned another language, or deal with native speakers of another language on a daily basis then English is probably all you need. Lucky us! That said, there are plenty of arguments that could be made for picking Chinese as the #1 foreign language to learn.

            But my point isn’t about the merits of Japanese or Spanish or any other “overseas” language. I’m thinking more about Auckland. A 2011 study projected our Asian population to double from 200,000 to 400,000 by 2016, the vast majority of whom are Chinese. I take it the numbers include native English speakers. So the question is fast forward to 2040 and will our Chinese population, which by then will presumably be much greater, gradually speak more English (like in Singapore) or will the rest of us learn more Chinese? Or maybe a bit of both?

            Also, what has this got to do with Transport?!

    • Interestingly it seems likely that Ak airport will grow strongly, and much more certainly than airports in much more populous places simply because it will never face competition from high speed electric rail for most of its traffic. Europe, China, Japan, and to a lesser degree North America are shifting passenger growth to rail in very significant numbers. Growth in passenger flight is on routes where this option is absent, which is good for reducing liquid fuel demand.

      Passenger rail to the new terminal, well integrated with it, and servicing the Mangere community is urgently required. It should be being planned now. The current alternative is to spend endlessly on driving and parking to great cost of the whole city and nation. Can we please have some real economic evaluation of this situation; including whole-of-life, place quality cost, environment, and imported fuels dependency….? Too much to ask?

      Auckland is and will be an airport city; it is, but it need not and should not remain a vehicle clogged one too.

  • nearly 14,000 additional car parks!@!

    • Chris

      That’s not much considering the extra 25.5m passengers.

      • Greg N

        Its the same ratio of carparks per million passengers as they have now.
        (Growth is ~2.5 times the numbers of passengers and so they will have ~2.5 times the number of carparks as a result).

        So on that basis, it is a lot more carparks.
        Especially if all/most of those extra passengers are Asian tourists who will come and go by the bus-load not by cars.

        Personally I don’t want to drive to/park my car at the airport,
        I want take PT to/from the airport. But the current PT offerings are slow and crap so its always cheaper and more convenient to drive.
        Despite the fact that I have to park a long way from the airport terminal and use the transfer bus or walk its still quicker than using PT right now.
        And that simply has to change not just for Aucklanders using the airport, but for all passengers using the airport.

        Even if they never use PT themselves.
        [call it the "Bogota effect" - if enough of those people use PT then the others who don't use PT/never use PT will also benefit].

        • This is the crucial point missed by those who say they had a great car or taxi ride in other big cities in the world: yes, of course, but that vehicle journey was only possible because of the millions of other journeys not being made on the road.

          In the end this is the great stupidity of the government’s and Auckland Transport’s attempt to build a car only city of scale: it can’t work and it is the most expensive (although this is concealed through incrementalism and cross subsidy) and it makes for a vapid and low quality place.

        • My employer is based in Parnell, as I’ve said before, but we have a couple of staff in Gisborne and Wellington. When they fly up, as they do about once a month, they have to get a cab from the airport because it’s just too time-consuming (they fly mid-morning/mid-afternoon, so traffic isn’t a big issue) to get the bus. A rail link could get them to Britomart quickly and cheaply and then it’s a short taxi ride from there to the office. We will be far from alone in that situation. It’s probably tens-of-millions of dollars a year being wasted on taxis because there’s no reliable, quick public transport option for people who often have luggage and need to get from the airport into the CBD and surrounds.

  • Greg N

    On the question of who pays for the Rail link at the Airport.

    Why should the Government (local or national) pay the full costs for the installation of a station and tracks at the airport for sole benefit of private enterprise (the airport company). Lets be honest here its a private owned company now, just like the Casino is.

    So this is no different than Sky City wanting their own “stop” on the CRL – we’d expect them to pay the costs of “their side” – even if the track ran past their place, they’d pay to costs to be able to benefit from it.

    So I see the same is needed here – Airport pays for the Train Terminal(s) and installation of the tracks, signalling etc as needed on their property, while Local ratepayers and/or tax payers pay for the cost of the connection from the boundary of the Airport land to the rest of the network.

    This is how it works for roads, power lines, water mains, you name it – publicly funded to the boundary of your land, then you pay for the connection from there.

    Of course, once built, like roads, the Airport could then Vest the land and tracks etc to the Council (AT more likely) to own and manage as happens with roads in a sub-division.

    In reality the Airport has no interest in a rail line, their parking activities are too profitable and NZTA and previous councils have only been too keen to assist that process by building multi-lane roads to the Airport.

    What needs to happen now is that the Airport is told (by Ac and AT), no more publicly funded road expansions, so start planning for those extra passengers and workers using PT from now on or you don’t get your expansion approved.

    Otherwise what incentive has the airport got to change its spots?

    • Greg N

      Oh yeah, and how about a per car-park surcharge to pay for the rail in the meantime?
      5 dollars per car park per day will raise 18m a year to pay for rail and Pt improvements easily with 9,700 car parks (workers and passengers)
      I’m pretty sure that a $5 a day tax for providing car parks will help change the attitude of the Airport bean counters to their lucrative car parking business. Especially if they aren’t allowed to pass those charges directly on to the end-users as they pay monopoly rents now for the car-parking at air-rort (oops airport), I know I do.

      • Frankone

        Or a new infrastructure levy on airline tickets- all those tourists are going to have a significant impact.

        • Greg N

          There is already one of those in place (departure tax), its now included in the air ticket price now so you don’t see it but it pays for the continual airport expansions.

          So if we added another tax on top of that would the airport want it to be invisible to passengers too like the current one is?

          I’m not so sure they would want it hidden if the tax funded non-airport infrastructure (like say the train tracks to the airports boundary, or extra EMUS to run on said tracks) would you if it was your business?

          And right now those voluminous numbers of Chinese travellers are gonig to be transported around in buses not by using PT.
          None of those travellers goes near PT the whole time they’re in NZ.

          So do we institute a bus tax instead and who pays – the bus operator or the overseas traveller?
          And how do you decide a bus is carrying overseas tourists as opposed to locals to tax it accordingly?
          Or do you put a bus tax in place for any buses who use the airport? then that simply transfer the costs onto PT users as they use buses too?

    • SDW

      I’m not advocating that the airport contribute nothing but I do not agree that the airport is the sole beneficiary of a rail link to the airport – there are benefits for users of the airport (i.e. Aucklanders) who would be provided with a viable (cheaper & potentially quicker) alternative to getting to/ from the airport without the need for a private car, there are additional benefits like reduced congestion/ emissions in the area as well as potentially positive economic impacts for the region/ New Zealand from improved visitor experiences for international/ domestic tourists.

      I’m not sure about the rating system re the Airport but would a rail link also drive up the value of land and increase potential ratings take from the company which could help off-set the cost of building the infrastructure. Id also argue that due to the national significance of AIA, this would ideally be a project led by Central Government rather than purely AT.

      • Greg N

        The airport is not the sole beneficiary of an airport rail link, no one said they were.
        But the airport company says “we ain’t paying for no damn railway period”.

        Which is in my view pretty short sighted and not all being a good corporate citizen like they make out they are – especially as they will be on their own proclamation one of the biggest employers/landlords in Auckland..

        Note they didn’t say “well pay our fair (or any) share” they said “we’re not paying for it” (beyond allowing space for it to be built by someone else at their expense).

        Big difference.

        Would they get away with it if they took the same attitude to roads to/at the airport? Of course not, so why is this different?
        Ah thats right, its PT and so it doesn’t count.

        As far as rating uplift goes, I think the airport likes things the way they are thank you very much, they pay rates on limited use land as its under the flight paths of noisy planes (or is under controls in the district plan that control what can be built on it, so the land is worth bugger all ratings wise as a result).
        And airports need pots and pots of cheap/low ratable land to act as noise buffers.

        But they can make a pile of money on each car park they add right now – probably more than the same space if setup as retail big boxes or as larger airport facilities.
        And all without paying the high rates that go with these other developments..
        So yep, they’ll take “the status quo option for 50 points” please..

        Previous councils in the past had a policy of capturing 50% of the land value uplift due to zoning changes.
        Don’t believe current council does this high a percentage.
        They just approve zone changes and hope they’ll get some money back.

        • SDW

          “Why should the Government (local or national) pay the full costs for the installation of a station and tracks at the airport for sole benefit of private enterprise (the airport company).”

          • Greg N

            I said “at the airport” not “to the airport” – a big difference.

            A fair chunk of the cost the airport rail link is the station and surrounds – which is all on airport owned land.
            As the airport is a private company why should any public money pay for public infrastructure on their land?

            Can you name a similarly scale example where a privately owned company got this degree of taxpayer derived benefit?

            Lets put to one side the Warners Borthers Hobbit films deal, the Bluff smelter $30m subsidy and the $400m Convention Centre for Pokies deal & the Transmission Gully PPP as they don’t count towards this argument.

          • Sailor Boy

            The trucking lobby getting a motorway from Drury to Cambridge?

          • bbc

            It’s for the sole benefit of all Aucklanders who want to get to the airport, we’re paying for regardless through endless upgrades to the surrounding roads and the recently announced several hundred million dollar further upgrade to motorways of roads to the airport.

  • Pete g

    Auckland council holds a number of shares, surely they could suggest that money be targeted towards the implementation of a railway station?

    • Greg N

      One part of AC holds those shares but they’re not a majority shareholding (thanks to Banks old National Party mate Bill Birch telling the old ACC to sell half their shares to reduce its debt a few years back).

      And even if they did hold half the shares, the investment arm who hold these shares has no social or non-monetary aims (as per the rules that set it up), except to maximise the income from the council assets.

      So, if they were given a choice of taking a lower dividend and have all/some rail or PT improvements paid for by the airport instead of rate payers, or take a higher dividend they’d vote for the latter option every time a coconut.

      And right now, they’re not the majority so don’t get to have that say anyway.

      If council was able to I’m sure they’d buy enough shares to get control of half the airport and then control it that way, but they can’t now increase their shareholding without making a full takeover offer (unless the government was to pass a law to waive that requirement). And in any case, the majority shareholder these days has to act in accordance with the shareholders in totality not just its own wishes, so they can’t simply force all shareholders to take lower dividends becuase they want to do so.

      So once again thanks Banks and your Mates for selling future Auckland down the river – again with your shortsighted decisions

  • TheBigWheel

    As the maps and charts how, the Airport precinct is the pre-eminent location of Auckland’s future economic growth outside of the CBD.. and in fact rivals the CBD. Amazing really. So should we not be thinking and planning in terms of making the airport (or at a decent part of least its hinterland) look and feel more like a second CBD.. rather than “the airport”. Notwithstanding that inevitably it will also need to accommodate large scale big box logistics operations and car parks. For example, when the railway is built, maybe the land adjacent to nearest stop or two from the airport could be zoned and planned accordingly?

    And while we’re at it, quietly drop the unrealistic notion that Manukau or any of the other smaller metro / town centres is some kind of alternative CBD?

  • What assumptions is this massive level of growth based on? It seems high to me. I appreciate there are some markets with potential, but much of the market from AKL is quite mature and it is hard to see it growing given it is hard to see it getting cheaper (given basic costs like fuel).

    • JimboJones

      I think there would need to be some radical changes in the price of fuel or aircraft technology for this massive increase in passengers. Its possible but you wouldn’t bank on it.
      As more head offices move from Wellington to Auckland the number of domestic trips might even reduce.

      • xdb

        Wellington is also considering extending its runway to accommodate more international flights. If this goes ahead it will reduce the need to transit through Auckland.

    • Greg N

      I think they assume that every plane that arrives will be an Airbus 380 sized plane, full the gunwales with passengers (mostly from China or Asia).
      They predict aircraft movements an hour going from 22 to 32 – thats 1 every 2 minutes during the 6am to midnight period.
      only airports like Heathrow and O’Hare would have those kinds of volumes.

      Still if you look back the same amount of time (30 years) as they look forward and see what the volumes were then you may simply see that they are linearly extrapolating the past 30 years growth as a predictor of growth for the next 30.

      But is that a realistic prediction to make in a future carbon constrained world?
      I don’;t think so.

      • Not so sure Greg. Flying is so useful and so difficult to do with alternative technologies I believe it will still be using liquid fuels and producing carbon emissions long after we have de-carbonised and electrified all land and much sea transport…. Last cab off the rank IMHO.

        • Greg N

          Ah yes, the planes may use fossil fuels and we’ll probably be all having Airbus 380 or whatever they are flying the skies them due to their massive fuel efficiency advantages.

          But what I meant was about how we get to and from the plane/airport?

          Thats my point, will we need 2.5 times the number car parks in 30 years as we have now, to deal with 2.5 times the number of passengers?

          I’d surely hope we’re not still assuming you drive the airport and park your car at the same rate as we do now 30 years from now.
          So comment is that I don’t think the airport should be planning on adding 14,000 more carparks bythen, but how many they will add/need is an open question depending on when proper integrated PT to/from the airport is delivered.

  • Jennifer Ward

    Meanwhile we are being driven nuts by increased and noisy, random overhead fight paths that the moronic PR trout Judy Nicholls extols as ‘fairer’…

  • The airport must soon realise they need much better public transport, or they will choke themselves with traffic. With the mix of hoplessly designed busiess parks and vast amounts of extra visitor and staff parking they surely must realise journey times the airport will only get longer and longer.
    Notably the car dependent business parks will make it much harder for travellers to get to and from the airport.

    The one positive is the staff parking being pushed out to park and rides. This will make public transport much more effective, as if people have to catch a bus to the carpark, they might find it easier to just catch a public bus home. Once the 380 is running as frequent service with good connections at transfer points should make PT a much more viable option for staff, as it really isn’t at the moment. I did read that they dohave a deal with the Airbus Express to get reasonably priced travel for staff on that, though not sure how much this is used. Would be great to extend this across the AT HOP cards, and in general get an easy scheme working city wide to encourage employers to give staff PT discounts.

  • Ross Clark

    Start here: http://en.wikipedia.org/wiki/Aerotropolis

    My take on things is that the bulk of the demand for airport rail will be from the international traffic. Domestic traffic is too dispersed away from the main rail and other corridors, and luggage is a pain to shift on a bus, or train (I know – I’ve tried!)

    In the meantime, the airport travel market can be nurtured by (a) promoting the bus into the CBD (it’s mostly hotel & backpacker traffic); and (b) providing a *free*, *frequent* shuttle connection through to Papatoetoe to link into the rail network.

    • Sailor Boy

      Really, I have never had an issue with luggage on PT…

    • Frankone

      Yes, seems to be a common trend e.g. http://youtube.com/watch?v=Dhg5RVBidLk
      So much for all that talk of reduced business travel due to teleconferencing etc…..

    • Surely people on domestic flights generally have much smaller luggage than those on international flights so seems to be a bit of contradictions. Lots of domestic trips might just be one day, or overnight so most only a small bag.
      I think rail could pick up a higher share than bus because of potential for pickup/drop off at stations along the way. For example considering quoted 25 min trip from airport to Newmarket would be very attractive to Remuera dwellers to get the train and then pick-up/short taxi from Remuera or Newmarket.
      Same could be true of busway stations. For example have thought about direct services down Northern Busway to airport, and same for services from the NW through the future bus-way stations then down Waterview Connection to the airport. With luggage the transfer penalty is quite high so direct services may be a winner.

    • @Ross Clark I’ve travelled with luggage on trains in many countries in Asia and Europe without a problem. Provided the trains are designed with travelers in mind (i.e space for luggage) and our airport trains aren’t standard commuter trains then it should be sweet.

  • Good grief of course luggage is fine on trains, whether with purpose built locking racks like on the Narita Express I used last night, or standard tube trains of the Picadilly line to Heathrow, or the light Metro cars of the DLR I used last week to get to London City Airport.

  • Ross Clark

    @kefs, @patrickreynolds
    Fair comment, *as long as* the trains are designed for travellers & luggage. This is certainly not the case for the Picadilly Line.
    @LukeC – your point abt the transfer penalty from luggage is the one I was trying to make.

    • Increasingly drivers to Ak airport are being shifted to park n rides some distance from the terminals… And this will only increase if they are to add 14k more spaces! So everyone except the taxi uses and valet parkers will be enjoying the joys of transferring with baggage. I find that system by far the most irritating; if I’m going to drive I at least want to take advantage of its famed point to point advantage. Driving through AKL and then paying a lot to store the tin can, yet still transferring; very poor option.

      This morning I spent $90 on a taxi from AKL to Grey Lynn, interestingly the most expensive airport or train station connection of my recent trip. Including getting through cities of up to 35million people.

      The cheapest was zero; walking, with luggage, to the San Sebastián Train station, followed by €1.40 bus + walk Bilbao airport to CBD. Then Barcelona Metro from Sants station, and Barelona to the airport (train is cost of standard journey on city network though station is not well integrated with terminals) tube/DLR to London City Airport, also just a local trip cost.

      In shanghai we took the uber fast Maglev plus a taxi, for shits and giggles, spending a lot more than the small change it costs to use that city’s extremely efficient, safe, and widespread Metro, but still way less than my Ak taxi.

      Tokyo the NEX, or Narita Express, is pretty cheap, the other London airports were more expensive, have to look up the Gatwick express…. Of course getting to the train stations is really cheap.

      • TheBigWheel

        Nice list ;-)

        I could add from last month.. Bremen – tram, connecting to train; Frankfurt – train (also a rental car); London – train connecting to tube; Amsterdam – train. Apart from the Heathrow express which cost about GBP 15, I don’t think I paid more than $10 to get to/from an airport.

        Except in Auckland of course where if I hadn’t got a lift I would have paid a $75 taxi.

        • keyboardwarrior

          $75….yet another reason not to live in Auckland. The place is so 1950s.

          Tip for the day – try the Heathrow Connect next time and save 10 quid – if you get the times right.

  • Airport Rail debate Melbourne style: http://blogs.crikey.com.au/theurbanist/2013/10/23/could-melbourne-have-airport-rail-sooner-rather-than-later/

    Same issue; the people want it, the political overlords don’t see the point through the windows of their taxpayer funded limos.

  • tuktuk

    ‘Same issue; the people want it, the political overlords don’t see the point through the windows of their taxpayer funded limos.’
    ……and they don’t hear the people either due to the noise made by a few greedy vested interests

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