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Airports in the New Millennium

Hon Mark Gosche
Minister of Transport
Airport Council International – Pacific Regional Assembly and Conference
8 April 2000

Airports in the New Millennium

Kia Ora Koutou, Talofa Lava and Greetings to you all.

It is a pleasure to welcome you to New Zealand, and to the beautiful city of Christchurch. I know that some of you very wisely arrived in New Zealand last week to enjoy some leisure time here before the business begins tomorrow. I hope that the rest of you manage to find some time to see some of New Zealand while you are here!

Events such as this – the tenth ACI-Pacific Regional Assembly - are important for sharing knowledge on the many issues facing modern airport managers. Looking at your programme I can see you have much to look forward to this weekend with speakers at the leading edge of the aviation business.

ACI-Pacific is the voice of Pacific region airports, representing some 150 airports in 27 countries. I am delighted to see so many representatives from this large and vibrant region here in New Zealand.

I would like to say a particular welcome to the contingent here from the People’s Republic of China, who are overseeing an enormous development of their civil aviation infrastructure. It is predicted that domestic and international air passengers in that country will increase from 61 million last year to an enormous 292 million by 2010!

ACI-Pacific membership is diverse in size as well as geography. For instance there are representatives here this evening from the Haneda domestic airport in Tokyo with approximately 50 million passengers a year making it one of the busiest airports in the world. And we also have a representative here from San Francisco Airport where new developments are costing approximately $3.4 billion in US dollars.

But as well the ACI-Pacific also represents countries where the annual passenger figures number in the hundreds of thousands rather than the millions – countries such as the Cook Islands and Samoa whose representatives I also welcome here this evening. In fact I understand that approximately 80% of ACI-Pacific’s member airports are classified as small (under four million passengers a year). This includes nearly all New Zealand’s airports.

New Zealand Changes

Although New Zealand has nothing to match the scale of change the Chinese are going through, our airport industry has nonetheless changed significantly over the past few years.

New Zealand’s airports have high standards of service and have become very quick on their feet in ensuring that there is sufficient capacity in place to cope with increasing demand. In fact our international air services are regarded by many as being among the world’s best.

Christchurch Airport is a fine example of this high standard. I know many of you will be interested in th e tour of Christchurch Airport tomorrow – particularly perhaps the contingent from Japan. About half of the many Japanese visitors to New Zealand pass through Christchurch Airport.

Aviation and tourism

Happily, New Zealand enjoys a very good air -transport system and is relatively unencumbered by the congestion and delays which plague many of the world's airports.

We cannot be complacent though.

In these days of increasing levels of trade between nations, the need for efficient transport hubs is taking on an ever-increasing level of importance.

As an island nation, New Zealand is particularly dependent on its airports, more so than less geographically isolated countries.

Around 27% of New Zealand's imports arrive here by air. And of the 1.6 million international visitors to New Zealand each year all but a handful arrive by air.

As the so called 'new economy' of internet trading dominates the headlines, we must not forget that this also very much relies on airlines and airports to transport the physical goods that can now so easily be ordered by consumers from around the globe.

Economic Downturn

Like many of your countries New Zealand was caught unawares by the Asian crisis. Perhaps the most surprising thing however is the extraordinary resilience the economies of the region have shown. They have adjusted rapidly to the crisis and as a result the region is back on a path of growth. The best example of this “bounce back” is perhaps Indonesia which went from a Gross Domestic Product of minus 13.2% in 1998 to .1% in 1999, nearly a 14% turnaround.

The New Zealand economy, I am glad to say, after dipping very briefly below the line, is also growing strongly and is forecast to continue to do so.

The crisis had a very real impact on our passenger flows among other things and, as a consequence, on our airports’ business. As part of the general recovery air passenger activity is now back on an upward track.

The recently released year ended February figures for international visitor arrivals into New Zealand illustrate this well.

In 1998 there was a fall in visitor numbers of 3.9%, but the following year that reversed to a modest growth of 1.3% and in the latest year ended February 2000 we enjoyed 9.3% growth.

In this latest year annual growth out of European tourism markets to New Zealand was 11%, out of South East Asian markets 26%, and out of North Asia a massive 36%.

As a result of the general economic recovery it still seems likely that we will achieve earlier forecasts that put the number of passengers travelling to, from and within the Asia Pacific region to around 1.1 billion passengers by 2010. That’s roughly equivalent to the entire world-wide passenger traffic in 1995.

That’s an amazing figure and one that offers all of us many challenges. Continued tourism industry growth will increasingly place demands on our transport systems and on our airport facilities.

Regulations

One of the sessions on your programme in the next few days is on the Australian approach to airport regulation. Regulation is an important issue, I believe, because it must be recognised that airports do enjoy a strong market position. It is therefore important to prevent this market position being abused.

For this reason New Zealand has a developed a regulatory regime for airports which involves emphasis on consultation with major customers and information transparency.

As part of this regulatory environment airports with revenue greater than ten million New Zealand dollars must split their assets and services into monopoly activities and non monopoly activities. Monopoly activities generally involve airside areas including airfield, freight and passenger terminal services. The remainder of the services, such as duty free shopping, fall outside of the regulations.

Airports are required to consult with major customers every five years over the charges for their monopoly services and disclose financial and management information about these areas. The first round of disclosure happens this year. There is also a requirement for consultation on significant capital expenditure.

As well, the New Zealand Commerce Commission is conducting a pricing inquiry and it is due to report in August 2002. I am waiting for the first round of disclosure and the results of the Commerce Commission review with great interest, as I am sure New Zealand airport managers are also!

Aviation Security

Aviation security is another issue of interest to us all that you will be discussing in the next few days.

The world is getting smaller and terrorist incidents do have the potential to impact on this region.

Last year New Zealand hosted APEC in Auckland and this year Australia will host the Sydney Olympics. The impact of events such as these goes beyond the boundaries of the countries in which the events are being held.

It is therefore important for the Pacific countries to work together to help manage common aviation security risks.

New Zealand and Australia have an accepted role in working with our South Pacific island neighbours to manage these risks – risks which are of course potentially our own as the Pacific Island countries have services that feed into both New Zealand and Australia.

The New Zealand Aviation Security Service (AvSec) runs a number of courses in the South Pacific to help these countries develop their aviation security systems. For example last year they ran courses in Samoa, Fiji and Rarotonga.

On behalf of ICAO AvSec also ran two crisis management courses for middle managers for the countries of the Asia Pacific region. Participants in these courses came from a variety of countries in the region, including Samoa, Vanuatu, Nepal, Mongolia, and China.

Summary

In closing may I say welcome once again, particularly to those who are in New Zealand for the first time. Thank you again for inviting me to open your conference. I am certain that the conference will be a very successful one.

ENDS

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