Airlines are warning they have no plans to fly long haul services to the capital even if a planned $300 million runway extension goes ahead.
Air New Zealand plane taking off from Wellington Airport. Photo: RNZ / Alexander Robertson
John Beckett, executive director of the Board of Airline Representatives (BARNZ), which represents 20 airlines, said the councils and the airport must talk to the airlines before they committed to spending the money.
The councils needed to know whether the public investment was sound, Mr Beckett told Nine to Noon .
"Our basic message is to the councils, 'if you're considering putting money in, please engage with BARNZ and with the airlines on the subjects so that we can talk to you about the real economics underneath this'.
"It is a public investment and it's very important that the public equation is considered carefully."
Mr Beckett said airlines feared the airport would need $50 million a year in taxes alone from airlines to cover the cost of the runway.
An economic impact assessment by Ernst and Young was seriously inadequate and BARNZ had released its own report by the Institute for Economic Research, he said.
The Ernst and Young report said a longer runway meant longer haul flights were possible, which would inject $1.75 billion into the national economy by 2060; Wellington would benefit by up to $684 million between 2020 and 2060.
Mr Beckett said a cost benefit analysis was needed to work out what the benefits would be if the runway was built and what the impact would be if the idea was shelved.
He was waiting to hear from the airport on the matter, he said.
"We don't know what the airport is doing, don't know who they might approach and who they might have in mind."
Significant critical mass was needed to make the long haul flights financially viable for the airlines.
"To operate large aircraft, they have to have those planes filled to 80 percent capacity day after day to make it economically feasible.
He said airlines made projections based on the likely profit when to deciding which cities they would operate out of, and there needed to be "enough cream in the numbers to make a profit".
Meanwhile an executive at Infratil and chair of the Wellington Airport Company, Tim Brown, said the airlines that released the paper critical of the planned extension were trying to maintain the status quo.
Infratil owns 66 percent of Wellington airport.
"I find it pretty weird actually that what sounds to me like some kind of collusion between suppliers can actually happen in the first place.
"I just think it's a strange, self-serving position, based on some sort of maintenance of the status quo. But this is an industry where the status quo is not maintained for long."
Mr Brown said he was talking with many airlines, who have given him a high level of confidence that they would be involved if the project goes ahead.
Charge criteria clear
Wellington deputy mayor Justin Lester said it had been made clear that only airlines using the extension would have to pay additional landing charges.
Photo: RNZ / Alexander Robertson
The airport company was already in discussions with airlines who were waiting to hear how the resource consent progresses, he said.
"We're talking to a number of airlines that are members of BARNZ and they are saying to us they're interested in looking at this in the future.
"They're saying they're interested in flying to Wellington, they want to continue discussions and we're looking at commercial arrangements."
Mr Lester said BARNZ was a lobby group which, together with Air New Zealand, wanted Wellington to remain a regional hub and Auckland the main international hub.
"Wellington is more ambitious than that. In the last five years in Adelaide, since 2006 when they opened their new airport with a runway extension, they've seen a 70 percent uplift in international passengers and that's because they didn't have international direct flights.
"They go to Auckland, Singapore, Dubai, Malaysia, Hong Kong. The economic advantage to Adelaide has been substantial and they've become a destination for Asian tourists.
"It's no longer a regional backwater, they became a major city and we ought to do the same in Wellington."
Mr Lester said Government has also expressed tentative interest, but is also waiting for the resource consent to be filed.
That was expected to be in June or July.
Mr Lester said the council was confident of its figures but if it had to, could sell some of its commercial leases in the city to fund the venture.
