Latest / The SME Stream / Can $6 billion improve Auckland Airport

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Can $6 billion improve Auckland Airport · The SME Stream

• 0:00
  Speaker 1: The information provided in this program is of a general
• 0:02
  Speaker 1: nature and is not intended to be personalized financial advice.
• 0:05
  Speaker 1: We encourage you to seek appropriate advice from a qualified
• 0:07
  Speaker 1: professional to suit your individual circumstances. This is the country's
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  Speaker 1: largest gateway, Auckland International Airport. Where I'm standing is what
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  Speaker 1: will be it's new domestic a jet terminal. How much
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  Speaker 1: of an economic boost could this infrastructure investment provide?
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  Speaker 2: You need the right infrastructure to enable growth.
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  Speaker 1: Well, you know what they say, build.
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  Speaker 2: That and they will come. Yes, there was a movie.
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  Speaker 2: I'm pretty sure.
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  Speaker 1: So why do you think airlines are kicking up such
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  Speaker 1: a fuss? Because they are?
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  Speaker 2: Yeah.
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  Speaker 3: I mean, if you look back over time and my
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  Speaker 3: career has been an aviation, airline and airport side, it's
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  Speaker 3: a long standing tension point.
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  Speaker 1: I feel very oddly dressed to be in the airport
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  Speaker 1: chicken area behind the scenes of one of the country's
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  Speaker 1: biggest infrastructure projects. Madison reading Auckland Airport's six point six
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  Speaker 1: billion dollar upgrade.
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  Speaker 2: Wow they got that deep into the ground, yep.
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  Speaker 1: Our tour guides are the airport's chief executives carry her
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  Speaker 1: to Hananui, her project managers, and the Hawkins construction team.
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  Speaker 2: So this is that the stitch.
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  Speaker 3: Yeah, so they if you go right back, you can
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  Speaker 3: see the plant of the old building. So and in
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  Speaker 3: fact that's the eastern end of the international channels that
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  Speaker 3: Isaac was saying, we've now built out. Wow, and this
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  Speaker 3: is kind of a connector or the stitch to this
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  Speaker 3: building then that he was just describing, so.
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  Speaker 1: International, the stitch which stitches it to domestic, which is
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  Speaker 1: this is domestic jet but Westandard.
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  Speaker 3: Correct. I'm sure Madison's interested in detail excavation, so yep,
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  Speaker 3: thrill me.
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  Speaker 2: It's going to be hard.
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  Speaker 3: So this is reinforcing bars so when they fill up,
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  Speaker 3: credit has something to bind to.
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  Speaker 1: So this is going to be underground the new domestic facility.
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  Speaker 1: No one's going to know of this, No, I'm glad
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  Speaker 1: we get to see it before you stand on it.
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  Speaker 1: So people will be picking up their bags pretty much
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  Speaker 1: on top of this.
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  Speaker 2: Correct.
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  Speaker 3: And I think that's what people miss it, like saying
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  Speaker 3: why is the airport of.
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  Speaker 2: The structure so expensive?
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  Speaker 3: And it's you're not building a tin shed or a
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  Speaker 3: warehouse that you just pick up your bag. You've actually
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  Speaker 3: got to whether it be for ensuring to Isaac Zulo
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  Speaker 3: comment that the building will withstand sharks New Zealand, and
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  Speaker 3: it's kind of oh yeah, perfect those elements. So it's
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  Speaker 3: often this under the ground stuff because the size, scale
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  Speaker 3: and obviously public use of the building and people just
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  Speaker 3: don't see it.
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  Speaker 1: Absolutely, and this is where a lot of the six
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  Speaker 1: point six bill has to go correct. It's under the
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  Speaker 1: ground before you even see a terminal. It's crazy. This
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  Speaker 1: project has caused somewhat of a runway rumble between the
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  Speaker 1: airport and airlines who think the spend is excessive given
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  Speaker 1: it will be paid for by passengers through higher landing
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  Speaker 1: and takeoff charges in future years, and the.
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  Speaker 2: Tension with airports and airlines.
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  Speaker 3: We need a really strong air New Zealand, and we
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  Speaker 3: need more foreign carriers coming because that's from if you're
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  Speaker 3: looking forward and if he's it's not an a war,
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  Speaker 3: it's an end And I know that sounds flip and tall, glim,
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  Speaker 3: but it is that piece of it. All those things
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  Speaker 3: need to come together for ultimately New Zealand to deliver
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  Speaker 3: to its ambitions completely.
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  Speaker 1: We want a strong carrier that can withstand competition, and
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  Speaker 1: it ultimately.
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  Speaker 2: Makes the more meta and makes the.
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  Speaker 3: Airport correct correct, and I then quite often people want
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  Speaker 3: it's interesting, you fine, and you must find this in
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  Speaker 3: your recording.
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  Speaker 2: People want to or it's a or be what it's
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  Speaker 2: like least all right? Right or wrong? Yeah? Up and down? Yeah,
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  Speaker 2: it's like it's A and B. We need to go
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  Speaker 2: hand and people are kind.
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  Speaker 1: Of what we're walking on what will be a two
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  Speaker 1: hundred and forty meter long pair extending out to twelve
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  Speaker 1: new domestic jet gates. It will connect to a brand
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  Speaker 1: new four story terminal with this view of the tarmac
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  Speaker 1: from the top.
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  Speaker 3: And the other thing about the gates is a number
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  Speaker 3: of them are what we call swing gates, a the
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  Speaker 3: ability to do either the narrow body jets or combined
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  Speaker 3: to do a wide body wow.
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  Speaker 2: So it gives you flexibility. So there's care.
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  Speaker 1: And the twelve new gates, are they all additional or
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  Speaker 1: are you also ridding of some gates?
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  Speaker 2: So what's the net edition?
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  Speaker 3: So in fact, that twenty six percent additional capacity is
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  Speaker 3: you've got the two extra gates all being A three
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  Speaker 3: twenty one capable ultimately and the last plan in future
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  Speaker 3: you won't have the domestic terminal in its current form,
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  Speaker 3: So this is replacing that sixty year old asset. And
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  Speaker 3: part of that is because in twenty thirty you may
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  Speaker 3: have heard us talk about the main runway needs lab replacements,
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  Speaker 3: which means we need the contingent runway. You can kind
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  Speaker 3: of see from here that the taxiway just how close
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  Speaker 3: it is to the domestic terminal, and so to enable
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  Speaker 3: those runway works, the contingent runway means you can't have
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  Speaker 3: jets parked along that side of the domestic terminal, of course,
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  Speaker 3: because they need a shot to taxi and plan so
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  Speaker 3: and in fact you it will decans into the new
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  Speaker 3: DJT region will continue.
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  Speaker 2: To operate out there for a little while, and we're
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  Speaker 2: in the throws.
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  Speaker 3: Now, well, what's the future regional look like? Consulting with airlines,
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  Speaker 3: et cetera.
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  Speaker 1: When are we getting a second runway?
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  Speaker 2: Ah, well, that's not saving any money.
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  Speaker 3: On the side of that that if out of.
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  Speaker 2: The master planning.
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  Speaker 3: I'm saying, what we do know is at the point
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  Speaker 3: in time demand dictates, we know where it'll be located,
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  Speaker 3: which is what the master plan does. It creates that
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  Speaker 3: view of so we don't build something a long term
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  Speaker 3: masset to only realize what it is so we know
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  Speaker 3: where it's going. But Ultimately demand will dictate that back
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  Speaker 3: to earlier conversation. As demand dictates and we see that,
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  Speaker 3: we'll firm up design past longage with airlines as part
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  Speaker 3: of that. But it's a good problem to add. If
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  Speaker 3: we get gross to the point that the second runway
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  Speaker 3: is demanded, that's that's good for New Zealand.
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  Speaker 2: Well, you know what, they say, build that and they
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  Speaker 2: will come. Yes, there was a movie on that.
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  Speaker 1: I'm pretty sure the existing international end won't change, but
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  Speaker 1: transfers into domestic will be a better experience with passengers
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  Speaker 1: passing through this new terminal.
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  Speaker 2: So this is where airline lounges.
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  Speaker 3: Yes, so this for it's sitting above the processing area
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  Speaker 3: which will go to anomer. Yes, this is like other
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  Speaker 3: lounges and the existinct terminal internationally.
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  Speaker 2: So good view of the time act, great customer experience
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  Speaker 2: when it's when it's finished. So this is like the champagn.
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  Speaker 1: Cheese and crack aslam more likely working if it's the
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  Speaker 1: domestic lounge. Right.
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  Speaker 3: Well, yes, you've got options obviously because you've.
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  Speaker 2: Now got to integrated.
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  Speaker 3: You've got the view of efficiencies that are created potentially
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  Speaker 3: for airlines as they're thinking about kind of those best
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  Speaker 3: back office functions of how they run their lounges. So
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  Speaker 3: that's a benefit to of an integrated terminal. You get
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  Speaker 3: some of those things that aren't necessarily seen from the
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  Speaker 3: customers but do create efficient efficiency opportunities.
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  Speaker 1: And it's big. The level below is the main area
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  Speaker 1: soon to be home to aviation security with forty percent
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  Speaker 1: more spaces, it would be great.
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  Speaker 3: This gives you an idea because of the current domestic terminal,
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  Speaker 3: we can improve technology.
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  Speaker 2: With aviation securities. You don't have to take laptops up.
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  Speaker 3: The footprint is the footprint that there is nowhere for
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  Speaker 3: additional Q space, So it was really important that we
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  Speaker 3: created the flexibility for processing because you also don't know
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  Speaker 3: in five or ten years what the processing requirements will be,
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  Speaker 3: so it's ensuring where you've got optionality around that. And
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  Speaker 3: there's things change.
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  Speaker 1: The screening is something you just can't avoid, and an airport,
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  Speaker 1: so you.
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  Speaker 3: Just need to create the space for it correct and
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  Speaker 3: technology will improve over time and do those elements, but
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  Speaker 3: you have to have the footprint that allows you to
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  Speaker 3: do it.
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  Speaker 1: The queues have been crazy recently too so.
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  Speaker 3: Well, and some of that is short term pain for
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  Speaker 3: medium term gain. Is the upgrading of the machines, which
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  Speaker 3: means you don't have to take the laptops out. But yeah,
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  Speaker 3: it's also there is that footprint can stand that we
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  Speaker 3: know we do everything possible, but that we are on
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  Speaker 3: the countdown to twenty twenty nine, and I suspect our
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  Speaker 3: passengers will be so that they can come across and
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  Speaker 3: actually have a much more seamlessness.
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  Speaker 1: This angle gives you more of a sense of just
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  Speaker 1: how much more open space there.
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  Speaker 3: Will be clear security, and then you'll be into the
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  Speaker 3: duell area, which could be coffee shops.
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  Speaker 1: To eat, and that's this you'd be hanging out here
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  Speaker 1: before going to your gate. I'm looking like an air
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  Speaker 1: hosting now.
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  Speaker 3: And around yes, and then out to the and then
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  Speaker 3: ultimately outdide car you're on gate whatever it is.
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  Speaker 2: Look at the space yep, it's huge.
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  Speaker 3: Yeah.
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  Speaker 1: After seeing the site, Carry and I sat down to
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  Speaker 1: discuss the investment underway and how the airport's profit is
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  Speaker 1: partly capped by regulators. Carrie, thank you so much for
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  Speaker 1: having us out here. I really appreciate it, pleasure. I
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  Speaker 1: think the big question is why we've seen what you're
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  Speaker 1: doing out here at the airport, but why why do
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  Speaker 1: you feel like this company needs to invest like it is.
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  Speaker 3: We'll probably two key drivers, and the first would just
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  Speaker 3: come down if you've been through the domestic terminal recently.
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  Speaker 2: The inn is full at peak times, and so.
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  Speaker 3: The ability for the future growth and capacity and competition
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  Speaker 3: and all those elements. It's a sixty year old or
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  Speaker 3: near sixty year old terminal and it is time for capacity,
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  Speaker 3: resilience renew The flip side of tho is when you
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  Speaker 3: then look at the economic and you know, we've recently
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  Speaker 3: had an economic impact studied in an Oakland airport and
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  Speaker 3: you've got thirty five billion dollars of economic activity that
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  Speaker 3: comes out of Oakland Airport. And so the combination of
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  Speaker 3: those things really underpins the why and why it's important.
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  Speaker 1: I don't want to ask you about economic impact because
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  Speaker 1: how much of this investment, the increase of the infrastructure
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  Speaker 1: and it's scale here at the airport, how much of
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  Speaker 1: that is to do with boosting the economy both locally
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  Speaker 1: and Auckland but also in the country given this as
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  Speaker 1: the biggest gateway into New Zealand, Or how much of
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  Speaker 1: this is actually just purely an infrastructure play for the
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  Speaker 1: business itself.
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  Speaker 2: And I would say it's all of those things.
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  Speaker 3: And the reason I mean, you know, it's not lost
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  Speaker 3: on anyone the conversations of an estimated two hundred billion
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  Speaker 3: dollars in infrastructure deficit facing New Zealand.
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  Speaker 2: And so that's a broader topic.
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  Speaker 3: You need the right infrastructure to enable growth and enable that.
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  Speaker 3: But more so in that play to say, if you
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  Speaker 3: look at from a longhol capacity, over ninety percent of
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  Speaker 3: flight that come into New Zealand arrive and at Oakland Airport.
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  Speaker 2: If you broaden that.
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  Speaker 3: To short hool airlines, that's more than seventy five percent
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  Speaker 3: of all international flights come here. Eighty percent of cargo
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  Speaker 3: arrives in the belly hold of a passenger aircraft and
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  Speaker 3: ninety percent of that arrives.
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  Speaker 2: Into Oakland Airport.
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  Speaker 3: And so you know, Oklin Airport is kind of this
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  Speaker 3: value engine, if that's why you want to talk about.
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  Speaker 3: It's got an ends, an ink roll that's incredibly important,
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  Speaker 3: you know, and the current government talks about doubling exports
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  Speaker 3: and ten years, Okan Airport, like many businesses, has a
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  Speaker 3: role to help enable that. So we have to be
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  Speaker 3: fit for purpose to actually deliver to that ambition. Both
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  Speaker 3: as an airport but also for endsetting.
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  Speaker 1: So how much more fit will this infrastructure investment make
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  Speaker 1: Aukan Airport in terms of trade that it can bring
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  Speaker 1: in in terms of passenger capacity in and out of
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  Speaker 1: the country too.
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  Speaker 3: So if you look that thirty five billion of economic
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  Speaker 3: activity that I talked about, that's as that today. If
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  Speaker 3: you roll forward to twenty thirty two, which is kind
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  Speaker 3: of the ten year planning horizon we worked to, that
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  Speaker 3: jumps up to fifty five billion in terms of that
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  Speaker 3: and that's made of domestic tourism, of international tourism, of freight.
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  Speaker 3: And I think people also forget they think of Oakland
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  Speaker 3: Airport as a place that you and I and travelers
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  Speaker 3: go to on our holidays or visiting family and friends.
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  Speaker 3: But actually the trade and freight activity is incredibly large
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  Speaker 3: as well. Auckland Airport is the third largest high value
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  Speaker 3: port compared to the Port of Totong and the Port
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  Speaker 3: of Oakland.
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  Speaker 2: So again part of that.
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  Speaker 3: Broader infrastructure and economic kind of engine side of things.
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  Speaker 1: Carry It's no secret that there has been quite a
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  Speaker 1: runway rum, but we call it quite some controversy around
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  Speaker 1: both the scale of this investment and who's going to
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  Speaker 1: pay for it. Can you explain to me how much
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  Speaker 1: it's costing and how you're financing it, and then we'll
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  Speaker 1: get to the airline part after that.
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  Speaker 2: Yeah, certainly.
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  Speaker 3: So we came out earlier and the tenure capital plan
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  Speaker 3: was six point six billion over the ten years and
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  Speaker 3: actually from and it will matter in a minute when
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  Speaker 3: we get to the airline side of things, but five
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  Speaker 3: point seven billion of that is what we call priced
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  Speaker 3: or regulated activities. Oakland Airport has regulated activities and things
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  Speaker 3: that are described as natural monopolies runway, airfield, air bridges,
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  Speaker 3: baggage systems, and then you have non regulated such as
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  Speaker 3: the retail property, roading and some other elements of that.
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  Speaker 3: So you've got a mix of those two things. When
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  Speaker 3: it comes into the who pays you've got it depends
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  Speaker 3: on those So the regulated elements are paid for by airlines.
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  Speaker 3: It's a user pays system, so if you're using the runway,
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  Speaker 3: then the charge is run through to that. When you
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  Speaker 3: look at the non regulated side, that is recovered through
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  Speaker 3: it's funded by Oakland Airport shareholders and off the diversified
• 12:44
  Speaker 3: balance sheet, and then it's recovered over the long term
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  Speaker 3: through things like commercial leases to those retail tenets for example.
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  Speaker 1: So the majority is regulated, which is price set by
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  Speaker 1: the Commerce Commission because this is a natural monopoly. As
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  Speaker 1: you said, we don't have a population unfortunately big enough
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  Speaker 1: to house more than one orcl airports. So how much
• 13:02
  Speaker 1: more are airfe is going to have to increase to
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  Speaker 1: help pay for that regulated portion, which is the majority
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  Speaker 1: of this investment that airlines are coughing up for.
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  Speaker 2: I think it's probably context. It's really important.
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  Speaker 3: So when you look at domestic jet charges, for example,
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  Speaker 3: they make up four to six percent of an airline ticket,
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  Speaker 3: so quite small in the scheme of things. If you
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  Speaker 3: look over the current pricing period which goes through to
• 13:23
  Speaker 3: twenty twenty seven, we're increasing those domestic landing charges by
• 13:27
  Speaker 3: a dollar seventy six a year. So from kind of
• 13:31
  Speaker 3: size and scale gives you an idea, it's quite small
• 13:34
  Speaker 3: in the scheme of things. It's also when we look historically,
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  Speaker 3: partly because the domestic terminal is almost sixty years old,
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  Speaker 3: it's been at forty to fifty percent less than other
• 13:43
  Speaker 3: major airports in New Zealand. So by the time we
• 13:46
  Speaker 3: get to the end of this pricing period at twenty
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  Speaker 3: twenty seven, okan airport will be either on par or
• 13:52
  Speaker 3: below those other major airports. And when you even look
• 13:56
  Speaker 3: across to Australia, so you've got a mixed there that
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  Speaker 3: airlines will pay for they use, and then the non
• 14:01
  Speaker 3: regulated piece, as I said, will be recovered by like
• 14:04
  Speaker 3: the user of those so commercial leases, tenant leases, et cetera.
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  Speaker 1: So why do you think airlines are kicking up such
• 14:11
  Speaker 1: a fuss Because they are.
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  Speaker 3: Yeah, I mean, if you look back over time and
• 14:15
  Speaker 3: my career has been an aviation airline and the airport side,
• 14:18
  Speaker 3: it's a long standing tension point and every five years,
• 14:23
  Speaker 3: you know the regime came into place about two thousand
• 14:25
  Speaker 3: and eight in terms of the Commerce Commission, every five
• 14:28
  Speaker 3: years or so you see the cycle of intense scrutiny
• 14:31
  Speaker 3: and conversation between airports and airlines and then obviously the
• 14:34
  Speaker 3: role of the Commerce Commission to review that.
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  Speaker 2: So it's been a long standing hot point.
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  Speaker 3: We'll call it that. And listen, I get it. Nobody
• 14:41
  Speaker 3: wants charges to go up. It doesn't matter what your
• 14:44
  Speaker 3: business is. You want to manage that. But at the
• 14:47
  Speaker 3: same time, if we go back to that economic engine,
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  Speaker 3: you have to have the ability to grow new Zealand
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  Speaker 3: to create competition, to create connections with New Zealand to
• 14:57
  Speaker 3: the world and each other. You have to have sit
• 14:59
  Speaker 3: for purpose facilities to do that, and so there's a
• 15:02
  Speaker 3: balancing act a little bit that comes with that.
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  Speaker 1: How much of this investment do you think is growth
• 15:07
  Speaker 1: for the future versus plane catch up because these are old, old,
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  Speaker 1: aged terminals.
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  Speaker 2: That we're dealing with.
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  Speaker 3: Yeah, I mean the domestic debt Teroma is nineteen sixty
• 15:15
  Speaker 3: six at commission, and so you have your adding capacity.
• 15:19
  Speaker 3: So there'll be twenty six percent more capacity in the
• 15:22
  Speaker 3: new domestic debt terminal than what there is today, forty
• 15:25
  Speaker 3: four percent more processing space, which nobody loves a queue,
• 15:29
  Speaker 3: so that additional space will be welcomed by our travelers.
• 15:32
  Speaker 3: It will be integrated into the international terminal, so it's
• 15:35
  Speaker 3: a five minute indoor walk instead of the outdoor walk
• 15:39
  Speaker 3: that it has been for many decades.
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  Speaker 2: So there's value across that.
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  Speaker 3: That's both that combination of capacity growth for the future
• 15:46
  Speaker 3: as well as than that renewal and resilience things like expansions.
• 15:50
  Speaker 3: It's the terminal, it's airfields, it's a transport network. You know.
• 15:54
  Speaker 3: One of the things mid next year will deliver, will
• 15:56
  Speaker 3: be significant stormwater resilience into the airfield that will be delivering,
• 16:01
  Speaker 3: which is key. We've seen unprecedented intensity at weather events
• 16:06
  Speaker 3: in the last couple of years and so it's also
• 16:08
  Speaker 3: future proofing for that, which is incredibly important as well things.
• 16:11
  Speaker 1: Like processing times and just making sure the customer experience
• 16:14
  Speaker 1: is relatively okay. Isn't that what an airport is just
• 16:19
  Speaker 1: meant to provide? Why should airlines have to pay for
• 16:22
  Speaker 1: making sure that that part is up to scratch, which
• 16:24
  Speaker 1: is your operation?
• 16:26
  Speaker 3: Yeah, I mean, I think it's those elements of Again,
• 16:29
  Speaker 3: there's a whole bunch of obligations that need to be
• 16:31
  Speaker 3: met with it be through the Civil Aviation Authority, and
• 16:34
  Speaker 3: airports have to be certified just as airlines do. So
• 16:37
  Speaker 3: you need to meet those requirements through border agencies and
• 16:40
  Speaker 3: as you say, you want an efficient process. But also
• 16:44
  Speaker 3: the airline systems also interface with that. So the check
• 16:46
  Speaker 3: in systems and the software and the applications that airlines
• 16:50
  Speaker 3: use need to interface with the airports. We don't necessarily
• 16:53
  Speaker 3: dictate what platforms they use, so it's an ecosystem and
• 16:57
  Speaker 3: I think that's a really important care, you know, I
• 17:00
  Speaker 3: see Opland airport as.
• 17:01
  Speaker 2: The conductor of the orchestra, so to speak.
• 17:04
  Speaker 3: And I mean that on the basis that there's things
• 17:06
  Speaker 3: that we control and should manage incredibly well.
• 17:09
  Speaker 2: There's things that we.
• 17:10
  Speaker 3: Need to influence and support such as water agency and
• 17:13
  Speaker 3: confinance requirements. And then customers for us is airlines stakeholders,
• 17:18
  Speaker 3: the millions of travelers that come through our day, and
• 17:21
  Speaker 3: that ecosystem only works if it's in concert and if
• 17:25
  Speaker 3: it's working together, and so our roles to play that together.
• 17:27
  Speaker 3: But fundamentally, when you look at air bridges, when you
• 17:30
  Speaker 3: look at tarmac and aprons and stands where the aircraft
• 17:34
  Speaker 3: park their plane, sorry airlines park their planes, that is
• 17:37
  Speaker 3: a user pays basis that that is one of the
• 17:40
  Speaker 3: underpinning enablers of airlines to undertake their businesses.
• 17:44
  Speaker 1: Quantas and their New Zealand have made the point in
• 17:46
  Speaker 1: this controversy that if prices on air fees keep increasing,
• 17:51
  Speaker 1: and they're already pretty high, if they keep increasing, then
• 17:55
  Speaker 1: that will ultimately in the end impact negatively tourism in
• 17:59
  Speaker 1: this company tree.
• 18:00
  Speaker 2: Do you agree with that? Are they wrong or are.
• 18:03
  Speaker 1: They right to suggest that if you keep bumping up
• 18:05
  Speaker 1: prices that ultimately it's going to come round about and
• 18:07
  Speaker 1: mean that too few people fly in and out of
• 18:10
  Speaker 1: this country in this airport.
• 18:11
  Speaker 2: You know, I think you know.
• 18:12
  Speaker 3: The one thing that airlines and airports absolutely have and
• 18:15
  Speaker 3: should operate a unison on is that they are volume
• 18:17
  Speaker 3: based businesses. So neither of those parties have an interest
• 18:22
  Speaker 3: in negatively impacting demand, right, and then you get into
• 18:26
  Speaker 3: the economic impact for New Zealand, that's that's a value
• 18:29
  Speaker 3: add But at the same time it's then I think
• 18:32
  Speaker 3: I suspect where the airlines are coming from. It's this
• 18:34
  Speaker 3: argument around elasticity and how that works. Again, if I
• 18:38
  Speaker 3: draw a comparison to say, so, we are improving our
• 18:41
  Speaker 3: increasing our domestic jet prices by dollars seventy six a
• 18:44
  Speaker 3: year overnight a couple of months ago, Air New Zealand
• 18:47
  Speaker 3: increased its baggage fees by ten dollars per bag. So
• 18:52
  Speaker 3: it all depends on how you bring those things together.
• 18:55
  Speaker 3: That the ability to provide growth, and that twenty six
• 18:59
  Speaker 3: percent press capacity is good for airlines, that creates growth
• 19:03
  Speaker 3: for airlines, growth for the airport, growth friends at ink
• 19:06
  Speaker 3: and so it's one of those elements that you need
• 19:09
  Speaker 3: to have the facilities to enable that to happen.
• 19:11
  Speaker 2: When is this going to be finished?
• 19:12
  Speaker 1: When are we going to walk through a new terminal
• 19:15
  Speaker 1: and have hopefully a seamless experience.
• 19:17
  Speaker 2: At this airport.
• 19:18
  Speaker 3: Yeah, we'll we'll certainly over the next five years. So
• 19:20
  Speaker 3: the integrated terminal itself is going to be operational in
• 19:23
  Speaker 3: twenty twenty nine, so that means we still have around
• 19:26
  Speaker 3: five years to get from today to that point.
• 19:30
  Speaker 2: But at the same time, we're also five years is
• 19:32
  Speaker 2: a long time.
• 19:32
  Speaker 3: So anyone that's been through the domestic criminal recent it
• 19:35
  Speaker 3: will have seen that we refreshed bathrooms, duell areas, the
• 19:39
  Speaker 3: food court, et cetera. Because it's really important that our
• 19:42
  Speaker 3: customers are having to look at good experience in the interim,
• 19:45
  Speaker 3: and we're also opening things along the way. So the
• 19:47
  Speaker 3: Transport hub, for example, open fully just in the last
• 19:50
  Speaker 3: few weeks, actually creating increased capacity for parking. It's on
• 19:54
  Speaker 3: the doorstep of the International terminal, and that's future proofing
• 19:58
  Speaker 3: because that's today the International termin or, but it will
• 20:00
  Speaker 3: be the Integrated Terminal in five years time, so we
• 20:04
  Speaker 3: will be rolling and opening.
• 20:05
  Speaker 2: Things over the next five years.
• 20:07
  Speaker 3: But the new terminal itself that you're describing that's twenty
• 20:10
  Speaker 3: twenty nine.
• 20:11
  Speaker 1: Where is this going to put Auckland Airport on the
• 20:13
  Speaker 1: international pedestal of airports? Are we going to be changy
• 20:17
  Speaker 1: not lax?
• 20:19
  Speaker 3: Well, we're certainly not going to have a waterfall in
• 20:21
  Speaker 3: the middle of our terminal, I can say that. But
• 20:24
  Speaker 3: actually we're a fit for purpose, modern functional airport that
• 20:28
  Speaker 3: is the appropriate proposition.
• 20:32
  Speaker 2: For New Zealand.
• 20:32
  Speaker 3: But we're very aware and you would have seen outside
• 20:34
  Speaker 3: the transport hub, for example, quite a bit of landscaping,
• 20:37
  Speaker 3: those four hactares that we've transplanted to Kawas and done
• 20:40
  Speaker 3: things that were really aware as people come, visitors come
• 20:43
  Speaker 3: to New Zealand that that feel of old tedle On
• 20:46
  Speaker 3: how they look at that. But yes, I would like
• 20:50
  Speaker 3: to think that that. No, we're not going to be
• 20:53
  Speaker 3: doing kind of the Changy experience in terms of some
• 20:56
  Speaker 3: of those added benefits like the jewel, but we will
• 21:00
  Speaker 3: create an experience that Kiwis and Oklanders can be proud
• 21:03
  Speaker 3: of and something that meets that need of today.
• 21:06
  Speaker 2: And take us into the future for decades to come.
• 21:08
  Speaker 1: And you're already seeing hotter competition from international airlines, especially
• 21:12
  Speaker 1: going from here to the United States. Do you expect
• 21:15
  Speaker 1: this investment to only.
• 21:16
  Speaker 3: Boost that, well, I think you've got the combination right.
• 21:19
  Speaker 3: So this is a domestic jet terminal replacement, so you
• 21:21
  Speaker 3: will see that and there is that flow through that
• 21:23
  Speaker 3: we know historically in a pre COVID environment, about twenty
• 21:26
  Speaker 3: percent of international inbound visitors would travel through on the
• 21:29
  Speaker 3: domestic and regional network.
• 21:31
  Speaker 2: So we're really.
• 21:32
  Speaker 3: Conscious that the role we do is not only international
• 21:35
  Speaker 3: domestic jet but also regional and how we feed and
• 21:38
  Speaker 3: support the system that comes through, and I think that's
• 21:41
  Speaker 3: something that's important as we go forward. But yes, we're
• 21:44
  Speaker 3: seeing North America last year that had a thirty nine
• 21:47
  Speaker 3: percent capacity increase from what it was in twenty nineteen.
• 21:51
  Speaker 2: Wow, compared to pre COVID.
• 21:53
  Speaker 3: That drove an increase in passenger numbers I think from
• 21:56
  Speaker 3: memory sixteen percent up on passenger visitors at increased HIGER
• 22:00
  Speaker 3: capacity by nine percent, but actually twenty six percent in
• 22:04
  Speaker 3: export earning. So what that shows is when you enable
• 22:07
  Speaker 3: growth and you enable those things, you do get almost
• 22:10
  Speaker 3: the multiplier effect that ends Ittting benefits from some of
• 22:14
  Speaker 3: that activity.
• 22:14
  Speaker 2: So now we'll really please.
• 22:16
  Speaker 1: I look forward to experiencing it one day. So thanks
• 22:18
  Speaker 1: so much your time Kerry appreciate it.
• 22:20
  Speaker 2: Thank you,