Longer Wellington runway worth 2-5 flights daily by 2060

Thursday 11th September 2014

Plans for a $350 million runway extension for Wellington International Airport would provide the capital with between 16 and 33 extra flights a week by 2060, connecting the city to long-haul destinations in Asia and North America and increasing connections to Australia, says a long-awaited report on the proposal from accounting firm EY.

At least a year since being commissioned, the EY report published today builds the case for a project that WIAL's 66 percent owner Infratil would seek to have substantially funded by local and central government.

Both the Finance and Economic Development Ministers Bill English and Steven Joyce have been lukewarm to date about the proposal, which would add 300 metres to the runway that straddles an isthmus in the city's southern suburbs and would involve reclamation either in Wellington harbour or into Cook Strait. Wellington City Council, which owns 33 percent of the airport, agreed to put $1 million to a $2 million resource consent scoping study last year.

The EY report does not attempt a cost-benefit analysis, concentrating instead on a net present value calculation of the benefits to the region on low, medium and high scenarios for the level of additional economic activity, both by diverting travellers who would use other airports and stimulating new travel.

On the low growth scenario, a total of 16 extra return flights a week - 10 to Asia and six to North America - might be expected 40 years after the extension opened in 2020, when it anticipates seven weekly flights would be running. Under the high growth scenario, a total of 33 additional return flights might be expected by 2060, 15 to Asian destinations, eight to North America, and 10 to Australia. In 2020, the date the study presumes the extension would be ready to use, the report assumes a total of 7 additional weekly flights on the low growth scenario and 16 under high growth estimates by 2060.

The report estimates national direct economic benefits of better international connectivity for Wellington "will result in between $127 million and $238 million additional expenditure in the national economy in 2020," rising to "between $136 million and $490 million" annual expenditure by 2060.

The report says total economic impacts, including induced and indirect benefits are hard to forecast, based on international comparisons of airports' performance.

"There seems to be a large degree of variability in terms of the size of the indirect/induced effects between different airports. Australasian experience suggests slightly lower indirect effects of around double the direct economic benefits," the report says. "In the context of Wellington airport, this means that an indicative estimate of the scale of induced and indirect economic impacts from the enhanced international connectivity opened up by the runway extension is likely to be in the region of $970 million to $1.7 billion in addition to the direct benefits."

While the availability of direct connections to Asia might assist in drawing international students to the city, the study found that was not a major consideration in choosing a study location, with affordability and the quality of education topping the list.

"Increased recognition of Wellington's tertiary institutions in the international rankings will also be critical" to any increase in the numbers of international student travelling through Wellington airport, the report says.

"Under all scenarios, services are likely to be commercially viable on Asian and North American routes from an extended runway becoming operational in 2020," it says. "The level of demand across these two strategic routes is sufficient to meant that initially, on average, a long-haul flight on one or the other of these routes would arrive/depart Wellington each day.

"In the medium and high scenarios, there is sufficient demand to support additional long haul capacity that operates via Australia."

WIAL chief executive Steve Sanderson said the company planned to lodge a resource consent application for the extension next year and has launched a public information website on the project.

“The extension would enable the next generation wide-bodied jets to link Wellington with the rapidly expanding Asian market and to North America, growing the number of international visitors to New Zealand and increasing our ability to offer new and more accessible visitor experiences,” he said.

Meanwhile, Auckland International Airport today announced an extension of services to North America, following Air New Zealand's decision to add three flights a week on its Auckland to Los Angeles route and fourth during July and October school holidays and added June and September to its existing five days a week service to Vancouver, currently running in July and August.

(BusinessDesk)

BusinessDesk.co.nz

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