Unhappy Airport Customers

 

Barrier Air to Hike Fares Amidst Auckland Airport $8 Billion Makeover

Auckland Airport’s ambitious $8 billion redevelopment project is casting a shadow over regional carriers, with Barrier Air at the forefront of concerns as airport taxes are set to surge. Grant Bacon, Chief Executive of Barrier Air, expressed apprehensions Friday over the impending financial strain, stating, “Some costs have increased by around 100 per cent overnight.” Ticket prices he says, will increase from April. The surge in operational costs due to the decade-long redevelopment is not only a concern for Barrier Air but has also prompted industry giants like Air New Zealand and the Qantas Group to demand scrutiny. Air New Zealand has led the charge, calling for an urgent inquiry into what it deems runaway spending by Auckland Airport, fearing charges per passenger could leap from $9 to $46 by 2032. The Qantas Group, encompassing Jetstar and Qantas flights, alongside industry bodies such as the Board of Airline Representatives New Zealand (Barnz), has echoed this sentiment, seeking greater oversight of airport costs. Amid the calls for investigation, Air Chathams, another key regional player, has voiced its struggles with the proposed fee increases, which it finds “extremely challenging”. With increased rents for hangars and office spaces compounding their woes, Air Chathams’ COO, Duane Emeny, highlights the disproportionate impact on smaller airlines that won’t necessarily reap the benefits of the airport upgrades, “We don’t feel it is fair to put this burden on small turbo-prop airlines with limited access to capital.” Emeny told NZ Herald. The culmination of these pressures is set to directly affect the wallets of travelers to and from Aotea. Barrier Air, facing the escalated charges and operational costs, says it will increase fares 8% starting April 1. The decision underscoring the broader industry challenge of maintaining regional connectivity amidst soaring costs, with Barrier Air and its peers caught in the crossfire of infrastructure upgrades and the quest for sustainable operations. As the debate over airport charges and regulatory oversight intensifies, the timing of Barrier Air’s fare increase could not be more significant, occurring just days before a community hui on Great Barrier Island. The meeting convened by Auckland Council and the local board, is scheduled for Wednesday and aims to tackle issues surrounding sustainable tourism practices to and from the island. Until then, passengers are faced with the undeniable reality: air travel costs to and from the island look set to soar.

Source : https://aoteagbi.news/2024/02/24/barrier-air-to-hike-fares-amidst-auckland-airport-8-billion-makeover/

Air Chathams raises concerns over Auckland Airport’s prices

Air Chathams is concerned that the skyrocketing prices Auckland Airport (AIAL) is charging smaller airlines will have a big impact on customer demand for important regional connections. “The increases we’ve already seen in this price period are extremely challenging, especially when combined with an almost 50% increase in commercial leases for hangars needed to service our Auckland based fleet over the past decade including the Pandemic years” says Duane Emeny, Chief Operating Officer of Air Chathams. “We’re very concerned about the effect of even higher prices on the future viability of our family business”. Passing on cost increases to travellers will impact on demand and fewer people will fly as a result. If demand for flights to the regions is reduced, that means fewer services, a reduction in cargo options, and ultimately some tough times and tough decisions for airlines like Air Chathams. “From our Auckland hub, we operate services to Whakātane, Whanganui, Kāpiti, the Chatham Islands, and Norfolk Island. All these connections see Air Chathams as the sole operator to help transport passengers and critical cargo to and from these airports. “What’s really tough about the prices at Auckland Airport is that regional airlines like Air Chathams and Barrier Air will use very little of what the airport company is building. We are all the way down the end of ageing domestic terminal, and this building will be almost unchanged in this price period. “We won’t be using the international terminal – because we only have one international destination in Norfolk Island, and that’s a single flight per week in Summer with no flights over Winter. At best, we will get some use from some of the tarmac upgrades. Regional airlines face some of the steepest price rises over the price setting event 4 (PSE4) yet we get the least in return.” The Regional Passenger Charges (RPC) will see increases from $2.64 to $6.88 over the FY23-27 period, and landing charges for aircrafts (less than 6 tonnes) will jump to $115.04 from $60.24. “It equates to hundreds of thousands of dollars extra each year which we have to find or absorb”. Emeny agrees that AIAL needs an upgrade, but the proposed investments should be efficient, sustainable, and affordable for regional airlines and travellers. “We support the need for improvements at Auckland Airport, but we don’t feel it is fair to put this burden on small turbo-prop airlines with limited access to capital. Our margins are so tight and it’s not like if we disappear that those remote regions will have another airline right in behind us ready to take up the route. It just means they lose their air service and the wider economic benefit that direct airlinks provide them”. “We support the Commerce Commission inquiry and hope that the right regulatory regime on airport pricing can be achieved that will be in the best interest of the New Zealand traveling public that rely heavily on the services us and other domestic carriers provide”. 

Source : Air Chathams media release

Air Chathams has this morning hit out at Auckland Airport's fees for airlines, warning customers could ultimately feel the effects and key regional connections could be impacted. But Auckland Airport has clapped back, rejecting the suggestion their changes will make travel unaffordable and arguing the carrier is opposing the investment to protect its margins. The airline said the airport's prices are "skyrocketing". Passing on the costs to passengers would see fewer people fly, the airline said, adding that could lead to fewer services, "tough times and tough decisions". "The increases we've already seen in this price period are extremely challenging," Air Chathams' chief operating officer Duane Emeny said in a statement today. "We're very concerned about the effect of even higher prices on the future viability of our family business." And "what's really tough" is that the airline doesn't particularly benefit from the increase, Emeny added. "Regional airlines like Air Chathams and Barrier Air will use very little of what the airport company is building," he said. "We are all the way down the end of ageing domestic terminal, and this building will be almost unchanged in this price period. "At best, we will get some use from some of the tarmac upgrades. "Regional airlines face some of the steepest price rises... yet we get the least in return. "Our margins are so tight and it's not like if we disappear that those remote regions will have another airline right in behind us ready to take up the route." 

Auckland Airport responds

A spokesperson for the airport rejected any suggestion the planned infrastructure upgrades will make regional travel unaffordable. "Regional airlines are a very important part of the aviation landscape at Auckland Airport," they said in a statement. "We have partnered and championed Air Chathams right from the start of their operation, working tirelessly to enable them to be operationally and commercially successful because of their importance to the regions they serve. "Airlines protesting against airport investment is a perennial issue that surfaces every five years when airports change their prices – a process which is currently underway. "Airlines have strong commercial incentives to oppose airport investment in order to protect their margins." The spokesperson added that, in addition to the current infrastructure build, consultation is underway with airlines on plans for increasing capacity and customer experience for regional flights." Our development programme will increase regional gate capacity and improve the experience for customers. "Delaying this infrastructure is not in our country's best interests."

The numbers

Regional charges make up "a fraction of the cost of an average regional airfare (4%)", Auckland Airport said, adding their "domestic and regional charges have been rock bottom for years – 40 to 50% lower than comparable airports". Between the financial years ended 2023 and 2027, the Regional Passenger Charges (RPC) will rise from $2.64 to $6.88, Air Chathams said, while landing charges for aircraft less than six tonnes will rise from $60.24 to $115.04. That's on top of "an almost 50% increase in commercial leases for hangars needed to service our Auckland-based fleet over the past decade including the pandemic years", Emeny said. The airport said that, by 2027, the regional charges would be comparable to Christchurch and Wellington airports. "Regional charges increased by $2.70 in July from $4.40 to $7.10 – this is $3 to $4 cheaper than comparable current charges at other major NZ airports," a spokesperson said. "Regional prices will average $8.15 over the FY23 – FY27 pricing period." The airport also drew attention to airfare price hikes. "Today regional airfares to and from Auckland are significantly higher than they were pre-Covid (30% higher in 2023 than 2019 or $39). "Regional airfares increased 16% between 2022 and 2023, higher than inflation which was 4.7% in the 12 months to Dec 2023."

Source : https://www.1news.co.nz/2024/02/23/air-chathams-hits-out-at-auckland-airport-over-skyrocketing-costs/