It’s
time for jets to come to Bay
Published HBT 24 April 2017
Hawke’s
Bay Airport is booming. For the six months to Dec 31 2016, profit
after tax was nearly one million dollars on the back of a 21.4% lift
in revenue combined with slightly reduced operating expenses.
The
outstanding feature of the past year has been a huge increase in
passenger numbers which for the half year were 326 489 up 55 978 or
20% over the same six months the previous year. For the full 2016
calender year 622 409 people flew into or out of Hawkes Bay up by 113
644 or 20% from the 508 765 a year earlier. For the previous 2014/15
financial year the airport handled 456 672 passengers a figure
scarcely changed from the 449 126 in 2008, seven years earlier.
This
increase is mostly due to Jetstar adding Hawke’s Bay to their
network from December 2015. As part of the Qantas empire they had the
financial resources to avoid being driven out of business by Air New
Zealand as happened to both Origin Pacific and Trans Air.
Apparently
the 20% growth has continued since the end of last year and I noticed
during two recent afternoon visits there were still 8 Air NZ and 2
Jetstar flights scheduled to operate each way between Napier and
Auckland. Assuming there were a similar number of flights earlier in
the day there could be around 20 return services or 1000 seats each
way a day just to Auckland. We still need competition on flights to
Wellington and Christchurch routes which have not benefited from
increased competition and as a result airfares remain relatively
high.
The
real pity is we might have been in this position many years ago had
it not been for the apathy, resistance and lack of vision of local
mayors, their councillors and the airport board. Rather than being
proactive and tackling our over priced airfares these leaders chose
to pour tens of millions of dollars into projects that have failed to
have any meaningful impact on our economic well being such as the $18
million museum and $15 million Opera House. In comparison the recent
improvement in air services has cost ratepayers nothing.
To
better illustrate this point, before Jetstar arrived the
Mayor of Napier claimed we were not being over charged by Air New
Zealand ( HBT 5/09/2014 ) then suggested Jetstar could damage Hawkes
Bay by taking all the highest paying passengers away from Air New
Zealand (RNZ nine to noon 19/06/15).
In
my six and a half years as a Hastings Councillor I cannot remember a
single instance of the Airport Board recommending a course of action
to create competition, improve air services or add new routes though
I certainly remember the many occasions when they recommended doing
nothing. Just as the council owners have wasted money the airport
poured 5 million dollars into a business park which has only
attracted one tenant and needed a nearly one million dollar write
down in value. Currently the emphasis is on a major terminal upgrade
even though it will actually contribute little to the Hawke’s Bay
economy. Terminals don’t attract passengers. Only new routes plus
better and cheaper air services do that.
Population
is the major driver of air travel. It doesn’t matter that Hawke’s
Bay is growing at only 0.9% p.a. because both ends of each city pair
contribute to demand by being both a source and a destinations for
travellers. With Auckland expanding at 2.8% p.a, this will translate
into a nearly 4% annual increase in passengers.
Other
factors that contribute to demand but not necessarily in order of
importance include the passenger perception of quality. People prefer
bigger aircraft which they consider safer, faster, quieter, less
cramped, more comfortable and less prone to turbulence. The Jetprop
type of aircraft flying in and out of Hawke’s Bay account for a
miniscule proportion of world commercial aviation. The major aircraft
manufactures Boeing and Airbus do not even bother to make such
aircraft.
Only
routes connecting Auckland, Wellington and Christchurch to Hawke’s
Bay justify any air service at all. Auckland should have the numbers
for jets and if we are to establish Hawke’s Bay as a place of
significance that is what we need.
However
there are destinations in Australia including Sydney and
Brisbane/Gold Coast that would also provide the necessary passenger
numbers for direct services and this is also what we need as well.
The
increase in passengers numbers over the past year is multiple
times the total numbers that visit the Museum, the Opera House and
most other council owned facilities which lose money. We seem not to
know who all these new travellers are but they must be
contributing significantly to our growing economy. The
airport contributes to our economy, makes money and pays a dividend to the Council owners.