Rotorua Airport changes in line with Business Strategy

Rotorua Airport changes in line with Business Strategy

The proposed transfer of assets to Rotorua Airport and the suspension of the Rotorua-Sydney flights are in line with the Airport’s business strategy to improve transparency, accountability and ultimately, the commercial performance of the operation says Airport chief executive, Alastair Rhodes.

The Rotorua District Council has decided to discontinue funding the Trans Tasman service, leading Air New Zealand to cease the flights from April next year.

“There have been a number of positive developments at the Airport in the past 18 months including the Q300 upgrade on the Auckland-Rotorua route, good high season forward bookings, greater community engagement, new tenants, the removal of the departure levy (to be absorbed into landing fees from 1 February 2015) and the Airport’s involvement in the Famously Rotorua campaign.

“These latest developments will help us achieve our objective of becoming a commercially viable operation that is focused on ensuring efficient and effective air connectivity to support the region’s economic and growth development.”

The proposed asset transfer would see the Airport’s operations and the Council’s asset ownership consolidated into a single entity, Rotorua Regional Airport Ltd, with the Council remaining a 100% shareholder of the Airport.

Mr Rhodes says the proposed asset transfer would have no impact on the Airport experience, but would allow streamlined operations and financial management, providing more clarity in reporting to various stakeholders.

He says the suspension of the Trans Tasman flights is the right decision to allow the Airport to focus on delivering better services and a greater return to Rotorua and the wider Bay of Plenty region.

The last Trans Tasman flight will be on April 25, 2015, with a schedule change between 31 March to 25 April, seeing the flights take place on a Tuesday and a Saturday.

“The New Zealand aviation market has changed significantly in recent years, resulting in airlines shifting Trans Tasman flights away from regional hubs to major ports. Rotorua’s close proximity to Auckland means it is also difficult for the regional Trans Tasman route to be justified with airlines.

“Ultimately it is the airline’s decision on where to fly and obviously this must be commercially sustainable. Each party has made their respective decision in relation to the flights – Air NZ, Rotorua District Council and the Airport – and we all acknowledge that the Trans Tasman schedule is not viable in today’s operating environment.

“We need to focus our network efforts on where we have a competitive advantage – building strong North to South Island tourism links and looking at opportunities to develop a direct Rotorua – Queenstown service. Our focus for the coming year will be on strengthening these links to provide better access for locals and businesses, as well as building stronger alliances with airports such as Auckland, Christchurch and Queenstown.

“Other key activities include commercial land development and placing an emphasis on attracting more general aviation to the Airport operation, including exploring the potential for flight training options.

“We also hope to lead an integrated air transport approach with other Central North Island airports to contribute to greater economic development in Rotorua and across the Bay of Plenty region.”

Mr Rhodes says private international charter flights will continue to fly in and out of Rotorua and the Airport will actively promote the region to the private charter market which offers a range of different business opportunities – both for the Airport and Rotorua. The Airport will continue to draw on Customs and Ministry for Primary Industries support from Tauranga.

Mr Rhodes says the suspension of the Rotorua-Sydney flights shouldn’t have a material impact on Rotorua tourism numbers.

“As Rotorua is positioned so closely to Auckland, we have found that operators in Australia generally route tourists through Auckland and the region is actively marketed as a Fly/Drive region as part of the Explore Central North Island group.

“Approximately one million international tourists visit Rotorua each year and a significant number of these continue onto the South Island. Focusing our efforts on continuing to build these strong North to South Island tourism links, and a potential direct flight to Queenstown, are of the utmost importance. “

Mr Rhodes says Air New Zealand will liaise directly with any passengers who may be affected by the cessation of the Trans Tasman flights.

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