Air NZ, Qantas lash out at Auckland Airport's upgrade plan, warn it may make flying unaffordable for 'significant number of travellers'

Air New Zealand and Qantas are condemning Auckland Airport's $3.9 billion upgrade plan, saying it could mean air travel becomes "unaffordable for a significant number of travellers". 

The criticism was unleashed on Thursday which is the same day as Auckland Council is voting on whether or not to sell its shares in the airport.

After unveiling its upgrade plan in March, Auckland International Airport Limited (AIAL) on Thursday outlined its plan to increase its airline charges over the coming years, starting in July.

Domestic charges are set to increase from the current $6.75 to $15.45 over the next five years, while international airline charges are set to jump from $23.40 to $46.10.

The airport's chief executive Carrie Hurihanganui said the changes "have not been introduced lightly".

"We are very mindful of the cost to our airline partners and ultimately, travellers," she said.

However, airlines claim the increases are too great, which will mean unreasonably expensive airfares for travellers and negative impacts on the tourism and trade industries.

Auckland Airport is "disappointed" in the airlines' response and argued some of the claims are "not true".

A joint statement from Air NZ and Qantas concedes the airport is in need of an upgrade, but argues it should be a cheaper upgrade which would mean less of a price hike for passengers.

"Indicative per passenger charges will roughly double on international routes by the end of this five-year pricing period and more than double on domestic," the statement reads. 

"Given AIAL's intention to spend billions more, there will have to be further significant increases to follow in the next pricing period, the extent of which AIAL has remained silent on.

"[The] planned redevelopment is predicted to increase airport charges to the point that air travel may become unaffordable for a significant number of travellers. This would impact both airlines, including Qantas' subsidiary Jetstar."

Air NZ and Qantas are calling for a pause in the upgrades until a more "efficient and affordable" plan is developed.

The statement also argues more funds from airport services like parking, airport retail and commercial property interests should cover the upgrade costs, which would mean less sharp increases to airline charges.

"We all agree that some investment in Auckland Airport is necessary," said Air NZ CEO Greg Foran.

"However, this is an enormous spend over a short period of time that adds almost no additional capacity. All it is expected to result in is more costs for everyone who uses, relies on, or passes through the airport, including the aviation industry, the tourism industry, the whole economy, and Air NZ's passengers."

"Airlines accept that investment is needed, but what AIAL is proposing goes far beyond what is needed or affordable," added Qantas Chief Executive Alan Joyce.

"Based on Qantas' experience, the necessary first phase of this redevelopment could be delivered for significantly less than $3.9 billion, and we're conscious that the final number will probably be higher, with cost overruns common to most large infrastructure projects."

However, the airport has responded saying the plan is affordable, emphasising an urgent need to upgrade the domestic terminal.

"We reject any claims that our infrastructure investment will hurt the travel market. Our independent studies show it's not true," an unnamed Auckland Airport spokesperson said.

"The fact is airlines have long enjoyed very low domestic charges that fairly reflect the age and condition of the domestic terminal, and it's in their financial interest to hang on to that for as long as possible. We get it.

"[But] the domestic terminal is 57 years old and needs replacing… [it] was already under significant capacity strain in 2019 and then the pandemic came. It will not get any easier or cheaper.

"We can't delay this any longer."

The airport's plan to increase airline charges will be reviewed by the Commerce Commission.