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I'm Susie Nordquist and for Chelsea Daniels and this is the Front Page, a daily podcast presented by their New Zealand Herald. Last week a brand new outlet mall opened in Auckland, right next to the international airport. Monowell Bay is a new two hundred million dollar mall on the airport precinct, boasting one hundred stores and eateries, including some
never seen before in New Zealand. The opening weekend, though, was marred by large traffic delays around the airport, which caused some flights to be delayed as crews were caught up in their congestion. So why has the airport decided to build a mall right next door? And how does this factor into the rebuild of our biggest international terminal. Today on the front Page, we are joined by New
Zealand Herald Deputy Business Editor Grant Bradley to tell us more. Grant, can you tell us a bit about Manawa Bay and how it came about.
Look, it's the latest commercial enterprise by Auckland Airport. It's a large shopping center, outlet retail center quite near the airport itself. It's been under construction for several years. There's a one hundred and eighteen shops and food outlets here, so this is a shopping center that can be reached from all parts of Auckland. And also it will be of interest to travelers who maybe have a bit of spare time before a flight.
Okay, quite popular as well.
Thousands of people flock to the mall to check it out at the weekend. Auckland Airport must be pretty happy with this response, but not everyone is happy about the traffic chaos this caused. Could more have been done to prepare for this.
It's very hard to estimate the public enthusiasm for these new malls. People love shopping and even in this tied economy, it's a bit of a reflection that if you've got the right proposition, people will be tempted. And that's what we saw at the weekend. Yes, Auckland Airport was surprised at the response. I've kind of done what they can
to smooth out the opening process. I guess they're opening hours from ten am to seven, so they're not at that peak time morning rush during the week and also they're making the point that this place is going away. It's there for a long time, so you don't have to get there on the first day. But look, more openings are notoriously popular, I guess in Auckland, and of course Auckland doesn't have a great transport infrastructure.
Bargain hunters are continuing to flock in their thousands to Auckland's newest outlet, mare Manawa Bay, which is less than three kilometers from the city's airport. A wave of shop is heading there for its opening. Caused major congestion on the main route to the airport.
Yesterday, so coming in obviously there was a bit of a wait to get in from off Theield motorway, so immediately.
The traffic starts and then car parking was ready.
For You've spoken to airlines and the board of airline representatives.
What are they saying about this?
Look, they're disappointed, they're frustrated and it has really reignited this friction between airlines and the airport. The airlines are worried that Auckland Airport is concentrating too much on the commercial side of their business, the retail the investment property side of it, which makes up well over half of its revenue, whereas the airlines what they want is an airport that functions smoothly for their planes and their passengers.
There've been headlines about delayed flights and some airline staff resorted to using bus lanes in an effort to get to work at the weekend.
This sounds costly, yeah, well it will be so. Airlines found that they had to rebook passengers who missed the flights on later flights. Normally they charge for that, they've apparently done it free of charge. And of course, if you are ticketed for driving in a bus lane, while you might find the consequences further down the track. So look, it's costly, but it's an enormous frustration for workers, and also you think about passengers. Traveling can be stressful for
people who don't do it a lot. They get nervous about missing flights, and this is just one more thing that lots of people didn't need.
This all comes as part of the airport's major rebuild efforts.
The domestic terminal is out of shine and out of space for more planes.
A new one is in.
The making, joining our other big airports. By joining the domestic jets and international terminals together, putting an end to the ten minute walk between them. And one point seven billion dollars for work like airfield upgrades to join the terminals, another two point I went two billion for the terminal itself.
Can you remind us of what exactly the airport is doing and why it's taking so long.
Yeah, Look, the airport's in the midst of a six point six billion dollar rebuild and new infrastructure. The start of the show will be a new domestic terminal which is going to be built on to the international terminal. In total, it's about three point nine billion dollars worth. And the rebuilding of that domestic terminal has been interminable. If you like, it's a near sixty year old building the existing one.
The new one.
Will provide a lot more options for travelers and as I say, being part of the international terminal make that journey a bit smoother for people who are doing both. But there's been a long process of negotiation with the airlines.
There's been a couple of redesigns, and the pandemic of course got in the way and talking to the airport's credit during that time and they did use it very very very quiet period to get on with roading infrastructure and they got that going pretty well, but as we saw at the weekend, it still is a little bit brittle.
What's the airport trying to do here?
Is it trying to create a destination for travelers like Singapore's Changy Airport just beyond the terminal And does it seem like the right move in your view?
Oh?
Look, airport's are pretty good at getting every last dollar out of a captive audience. You've got to go to the airport to fly, and so they're very interested in tempting you into shops that they lease. They want to rent out commercial properties in that Precinct's got about one hundred and fifty hectares here, so they're huge landowners. And you know, it's been said that Oaklands Airport is a large shopping mall that just happens to have a runway there.
Perhaps a little unfair, but the emphasis on the commercial side of the business does give a lot more credence to the airlines. View is that perhaps the airport company should be doing more for passengers and planes.
What could that look like?
The airlines, I suppose, would prefer to see the airport concentrate entirely on building gates, providing space for agencies to operate, although perhaps that's not the greatest option for passengers. Lots of people do like shopping out the airport, so I don't think we're going to see a lot of change the operating model unless is a big shake up and how the airport is regulated.
Moving on to terminal fees. Now the airport is charging airlines more terminal fees. Can you explain just what those are and why they're causing so much tension?
Good question. The friction between the airport and airlines as old as the hill's really in and it comes to a head around price fixing every five years. In the current period, Auckland Airport is looking to hike its charges quite substantially. You know, for example, domestic jet chargers will rise by three dollars fifty to ten dollars twenty at
the end of the five year period. International charges go up to thirty seven dollars there around twenty three dollars at the moment, so they're big hikes and of course this attracts the interests of the Commerce Commission, which looks at whether it's fear that the airport is using its capital spend to justify putting up prices like this for airlines.
The Communist Commission has said these charges are too high. Will Auckland Airport bow to pressure from them? And do you have any insights on what other airports are charging in these fees?
Yeah? Look correct. The Commerce Commission is worried about overcharging over this five year period buy up to TUR hundred and twenty six million. As a result of a draft report coming out in midyear. It's back to the drawing board to an extent, and Auckland Airport has said that yeah, it's certainly going to review what it's doing. It has put down prices in the past over these price setting periods and it will likely do the same, but by how much is unknown.
What does that mean for passengers?
The extra chargers at Auckland Airport puts it on. Airlines may be a bit lower, but at the end of the day, no matter who's charging it, passengers pay. And so to a degree, there's a lot of heat and noise about this, and the airlines are pushing back hard, the airport stating quite clearly its case to improve infrastructure out there, but yeah, we pay, flyers pay.
In the final analysis, there's no such thing as a free ride and airline landing fees will have to increase to pay for the upgrade. By how much, Well, that's down to Commerce commission. The airlines say they'll be forced to pass on those costs, but fear they'll be substantial and as a result some passengers will ultimately be priced out.
In particular, will affect the lower priced airfares. Those are the fairs that may no longer be available, and certainly our economic analysis suggests that a lot fewer people will travel.
Jetstar has come out and said the fee increase will make it difficult for its domestic operations to be commercially viable here and Quantus has said that the increased fees could lead to an annual passenger drop of one point five million. How concerning are those statements and what could the repercussions be.
Yeah, look, it's interesting that the Australian airlines have said that, and of course in New Zealand takes that view as well. These charges affect the low cost carriers in particular, or
the low fear into the market. It's a discretionary purchase for people who travel on those low affairs, and every doll accounts whether it's going to deter people from in those volumes from flying through the airport is probably up for debate, but it will certainly put some people around the margins off traveling and that's very bad news for airlines and ultimately for the airport.
A Jetstars just announced new direct trans Tasman flights from Hamilton and Dunedin. Could we see more examples of them sort of setting up in the smaller regions and moving away from Auckland.
Yeah, look, that's tremendously exciting. So from Hamilton, Jets is going to fly into the Gold Coast in Sydney from the middle of next year, and there are also flights across the TASM from Dunedin from next year. Jets and Quantus are keen on serving smaller ports in New Zealand and also flying to smaller places in Australia. So that's going to create options for travel, and it comes at
a time when Quantus is refleeting. They're getting brand new aircraft that are smaller aroun about one hundred and twenty seat mark ideal for serving smaller centers. So yeah, perhaps in the future you could look at a Toronga Napier getting international flights road ruas at international flights before. So yeah, great news for travelers is costs setting up international operations for local communities and so they all have to be taken in consideration. But that's a very bright prospect.
Now the statements from Jetstar and Quantus, they sound quite serious. Is that a bit of a threat in your opinion?
Yeah, Look, as I say, there's a lot of noise around this issue. We've heard some quite extravagant claims about just what Auckland Airport is doing out there. I think one Quantus executive talked about them building something akin to the taj Mahal. So you know, whether jets are would follow through on this and cut flights is another matter.
Grant, do you think all these changes at Auckland Airport and across its site are going to work out in its favor in the end or could some of this bad bloods with the airlines worsened by traffic jams turn into something more substantial. If so, what could that look like?
Feelings are running high the airline see this latest problem as something that they didn't need, and especially coming into the busy summer period, so they'll be hoping that choppers have maybe had their fill of rushing out to Martawa Bay. I guess what the Commerce Commission delivers in their final ruling may lower the temperature. But I think certainly on the commercial side, the airlines in Auckland Airport, they're fated
to scrap it out. It's usually in private, sometimes in public, but Auckland Airport, with a monopoly position certainly in this region and really across the country for international arrivals, is in an immensely powerful position, and likewise airlines so they have to serve this part of the country, and so in a way as status quo, with a fair bit of rhetoric around the.
Edges grant, if anyone listening to this podcast is about to head out on a plane, what's your advice to them?
As always allowed, plenty of time, travels a bit bumpy at post pandemic, and so this is one more speed bump in the way. It's not a biggie and hopefully it'll resolve itself. So maybe allow a little more time. And the other thing is just remember the frontline staff involved in the aviation system. It's not their fault. They always get in the neck from grumpy travelers and it's really not fair. They have to cope with these circumstances.
So you know, in the words of a few years ago, be Kine, thanks for joining us, grant pleasure.
That's it for this EPISO of the Front Page. You can read more about today's stories and extensive news coverage at zherld dot co dot enzt. The Front Page is produced by Ethan Sills. Patty Fox is a sound engineer. I'm Susie Norquist. Subscribe to the Front Page on iHeartRadio or wherever you get your podcasts, and tune in tomorrow for another look behind the headlines.