Domestic Hub Future Possible For Auckland Airport

New Zealand’s premier airport is forecasting a quieter future with a focus on domestic traffic. That’s their immediate expectation as New Zealand begins to contemplate emerging from a countrywide lockdown that has spared it the worst of the pandemic. But as a consequence of that lockdown, many local industries, including aviation and airports, have been fundamentally altered. Auckland Airport is just one business expecting a different future.

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Auckland Airport is expecting a very different future. Photo: Getty Images.

Slower business at Auckland Airport

In 2019, more than 21 million people passed through privately owned Auckland Airport. Before the pandemic, the airport handled about 179,000 aircraft movements annually. The airport is the home of Air New Zealand, while 31 other passenger and six dedicated freight airlines flew in.

Indeed, business was so good that Auckland Airport was busy planning and building infrastructure to encourage and facilitate expected passenger growth. Auckland Airport Chief Executive Adrian Littlewood said in February;

“Despite growth leveling off recently, traveler numbers are estimated to more than double to 40 million-plus per year by 2044. We know that we need to work fast to progress our transformation plans, and our core focus is on delivering the essential aeronautical infrastructure New Zealand needs to succeed for the future.”

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Auckland Airport will likely be a lot quieter for the foreseeable future. Photo: Phillip Capper via Flickr.

Fast forward a few months and things have changed. The Blue Swan Daily is reporting Mr Littlewood saying he expects Auckland Airport to be a much smaller, more domestic-focused airport in the short to medium term.

In April 2019, the airport saw about 58,000 passengers a day. In mid-April 2020, that number was down to about 3,500. Those scant numbers are derived from threadbare Air New Zealand domestic and Trans-Tasman services, repatriation services, and a handful of international carriers stoically maintaining services.

Auckland Airport cuts spending and halts infrastructure work

Work on a second runway, airport hotel, parking facilities, and a domestic jet hub have been put into hiatus.

“Auckland Airport is a resilient business, but these are unprecedented times, and we are now moving quickly to identify ways that we can manage the impact on our organization,” Mr Littlewood said.

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Auckland Airport has put much of its planned infrastructure spending, including on improved parking, on hold. Photo: Ingolfson via Wikimedia Commons.

Many contractors have been laid off, and airport staff may have to take a pay cut and work reduced hours. The Airport’s board, CEO, and top staff have lead by example here, already taking a 20% pay cut. This is a story repeated at airports around the globe.

A Trans-Tasman travel bubble offers hope for Auckland Airport

But there are already glimmers of hope for Auckland Airport. New Zealand is showing the first signs of coming out of a robust lockdown regime. It parallels what’s going on across the Tasman Sea in Australia. Both countries have avoided the worst excesses of the pandemic by virtue of being relatively remote islands, moving fast to close borders and implementing movement restrictions on their citizens.

New Zealand’s Prime Minister, Jacinda Arden, is now talking about a Trans-Tasman travel bubble, with both New Zealand and Australia opening their borders to the other country’s citizens and residents. It would be the first step in the long process of unwinding border and travel restrictions.

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Air New Zealand would also benefit from the operation of a Trans-Tasman travel bubble. Photo: Getty Images.

This would see Trans-Tasman traffic resuming. It would be a big step forward for the airlines that ply the route and the airports that service those airlines. Australia is the biggest source of international passengers for Auckland Airport. Three of Auckland’s top five international routes are out of Australia. The sector is also a core component of international operations for airlines such as Air New Zealand and Qantas.

While Auckland Airport’s forecasts for 2020 and 2021 may not be met and the concourses may be quieter than usual, the airport will keep marching forward. In five or ten years, what happened in 2020 will just be part of Auckland Airport’s corporate memory.