7 Jun 2012

New domestic terminal at Auckland airport

6:45 pm on 7 June 2012

Auckland International Airport Ltd is to build a new domestic terminal at a cost of about $300 million.

Chief executive Simon Moutter says the company is likely to decide on a site for the new terminal before the end of the year, and it will be constructed in stages over five to 10 years.

Mr Moutter says larger aircraft sizes and growing passenger numbers are putting the current domestic terminal under increasing pressure.

As a temporary measure, the company is spending $28 million on upgrading the existing terminal.

Mr Moutter says he does not anticipate any trouble with finding the cash to build the new terminal.

Plans to build a new northern runway have been put on hold until at least 2020.

Higher charges

Higher domestic passenger fees will be charged to fund the upgrade of the domestic terminal.

International charges will be flat, rising only in line with inflation.

Under the new schedule, airlines landing at either the domestic or international terminals will be charged the same weight-based rate.

Domestic passenger fees will rise by $1.32 per passenger.

Children aged from two-years-old will also be charged for the first time.

The charges are set every five years and will take effect from July.

Air New Zealand says the increase will cost it an extra $65 million over the next five years and it has no choice but to pass on the cost to travellers.

Mr Moutter says the fees were set after almost a year of consultation with airlines, and they will drive growth.

"Very good for consumers, for travellers, good for our investors as we can earn a return on investment, good for airlines because it's resulted in a slight reduction in their international charges and it's good for the New Zealand economy," he says.