22 Sep 2008
August domestic passengers were 10% above the previous year, down on the very high growth of recent months but still a strong result. Auckland and Christchurch routes continued to grow strongly, reflecting the impact of competition since Pacific Blue’s domestic start up. Apart from Invercargill, which has had new services introduced by Air New Zealand since this time last year, other routes were generally softer than the previous August.
Weather in Wellington and other centres over a number of days had some impact on the August numbers. A decrease in average seat load in August to 70.4% from the previous year’s 73.3% is tenable given the significant 15% increase in seat capacity over the previous year. Year to date domestic passenger volume for the five months ended August is 17.1% above the previous year following a 19.6% increase in seat capacity.
International passengers were level with those in the previous year, following a 2% increase in capacity. Air New Zealand’s temporary reduction in capacity on its Sydney services for the month of August was offset by the two additional Pacific Blue services to Brisbane and the recommencement of direct flights to Nadi. An average load factor of 70.3% was slightly below the previous year at 71.9%. Year to date passengers are 0.7% below the previous year with seat capacity increased by 1.8%.
Site preparation works are complete and construction of “The Rock” international terminal expansion is progressing. An older air bridge has been removed, its replacement connecting directly to a gate lounge within The Rock. The new air bridge will have the flexibility to serve a range of aircraft, including those with long haul capability.
WIAL has commenced a longer term master planning process to consider future development requirements and options for the entire airport site. Forecasting has predicted at least a doubling of passenger numbers over the next 20 years. Unfortunately, changes to Government regulation have introduced an element of unpredictability in the investment in airport capacity (see comments below).
Changes to the regulation of New Zealand’s major airports contained within the Commerce Amendment Bill have been enacted by Parliament. The changes introduce significant uncertainty for future investment over the next 2-3 years while the Commerce Commission develops its pricing guidelines and disclosure requirements. It is critical that the Government’s objective of providing greater certainty for investment is reflected in the outcome. Airports are a vital part of New Zealand’s infrastructure and future investment in airport capacity will be the major enabler of competition that ensures affordable airfares.
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