Air New Zealand boss Greg Foran doubles down on Auckland Airport dig, says customers will pay for redevelopment

  • 22/02/2024

The boss of Air New Zealand/Araraurangi Aotearoa says he's worried Auckland Airport's redevelopment will make flights unaffordable in future. 

Greg Foran joined AM on Tuesday, telling co-host Lloyd Burr customers will ultimately end up paying for the construction. 

"What we're concerned about is affordability [of flights] longer term," Foran said. 

Foran also said open communication between the two companies needs to improve. 

"Why don't we come up with a construct, as we do in other industries like this... where there's an ability to at least get into a proper dialogue?" 

Burr noted Auckland Airport is a "bit of a dog at the moment" and it "needs to be replaced".

Foran agreed there needs to be money spent and the airline supports it. 

"Our issue is how much and the ability to influence how much." 

It comes a day after Air NZ/Araraurangi sought an "urgent inquiry" into "overspending" by Auckland Airport. 

The airport's chief executive Carrie Hurihanganui told Newshub on Wednesday the domestic terminal is more than 60 years old.   

"It has done its job and adapted over the years but it is becoming end of life," she said. 

The airport will gradually bump up the amount it charges airlines to land on the airstrip, initially $6.75 per person, rising to $15.45 by 2027. Airlines pass the cost onto passengers.

Foran claimed it would bump up ticket prices by about $40 but Hurihanganui said concerns were overblown and cost estimates can change. 

The airport has proposed to spend between $7 and $8 billion over the next 10 years on the redevelopment, which will merge the domestic and international terminals. 

It hopes to eventually accommodate 40 million passengers a year. 

'We knew this year would be tougher than the last'

Air NZ/Araraurangi also announced its interim financial results on Thursday. 

Earnings fell 38 percent for the first half of the 2024 financial year, compared to FY 2023 (down to $185m). 

And net profit fell 39 percent to $129m (after tax). 

But passenger revenue and operating costs rose 21 percent, due to an increase in capacity on international flights. 

Chair Dame Therese Walsh said the result reflects the hard mahi of staff. 

“We knew this year would be tougher than the last, when pent up levels of demand and industry-wide capacity constraints drove one of the strongest financial results in our history." 

The airline expects a worse result in the second half of the financial year. 

Watch the full video for more.