20 March 2009

CIAL introduces airfield pricing solution

Christchurch International Airport Ltd today announced an increase in its airfield charges to airlines through a new airfield pricing structure designed to lift the company’s performance but at the same time assist its airline partners to manage their way through the current economic recession.  The announcement follows lengthy and extensive consultation with the airlines.

CIAL’s landing charges have remained the same for the past eight years, providing inadequate returns for the airport company.

Acting Chief Executive Jim Boult said the airport company had come up with an innovative pricing regime that is both a commercial and pragmatic solution for its airline customers and which acknowledges the current global economic recession.

“We are proposing a graduated implementation of the new pricing structure over a 16 month period.  While this effectively lowers the true cost of our airfield charges, we believe it is a responsible initiative to assist airlines to manage the tough economic environment we are all facing.

“The charges were normally reviewed at three to five year intervals to reflect changes in the aviation business, cost increases and increases in the value of the airport’s airfield related facilities and services.  In CIAL’s case, this has not happened since 2001, which has been of considerable benefit to the airlines.

“The impact of the increase in the overall airport charges represents about $1.30 per passenger on average.

“When the increase is viewed against the fact that airfield charges have not been reviewed in the last eight years, the overall effect represents a very reasonable charge. This is further assisted by the graduated implementation,” Mr Boult said.

“The reality is that our airfield charges represent a very small part of an airline fare”, he added.

 “The new charges will still enable CIAL to provide lower airfield charges than Wellington and Auckland airports. 

“Our approach is focused on providing for future growth and development of Christchurch airport, making it an attractive airport for airlines and tourists, bringing much needed visitors to Canterbury and the South Island.

“We appreciate that foregoing higher charges will have a short-term impact on our ability to achieve a better financial outcome for the company.  However, the Board believes it is important to demonstrate leadership and take a longer term view in the current environment to assist our airline customers manage their immediate costs.  “We are confident this change will provide long-term benefits to both the airport and to the growth of business and tourism in Canterbury and the wider South Island’” Mr Boult said.