Aviation, tourism and energy writer for the Business Herald

Airport delays possible as aviation booms

Airways reported a net profit of $23.2m in the year to June, ahead of its budgeted $16.5 million profit. Photo / NZME
Airways reported a net profit of $23.2m in the year to June, ahead of its budgeted $16.5 million profit. Photo / NZME

Airways is warning of possible delays at busy airports if the aviation boom continues at current levels.

While the air traffic control agency was "on top of it for now," it was going to be harder to make sure all airlines were not hit by congestion.

The state-owned enterprise posted a 54 percent increase in annual profit and more than doubled its dividend to the Crown as it benefits from an 8 per cent increase in flights.

Growth this year is expected around the same level.

Airways reported a net profit of $23.2 million in the year to June 30, ahead of its budgeted $16.5 million profit.

It will pay a $9 million dividend to the Crown, up from $4 million the previous year.

Airways said cost management, especially around staff which make up 70 per cent of spending, was critical to achieving the result.

Chief executive Ed Sims said the company was spending more on technology over the coming year to tackle congestion.

It expects capital expenditure in the year ahead to around $40 million, having increased it 10 per cent in the last financial year, much of it on infrastructure at Queenstown Airport to allow night flights.

Sims said delays in New Zealand were still being measured in seconds per flight rather than minutes. Overseas where aircraft are in holding patterns for 20 minutes.

"We've planned our resource lines and rosters to make sure that doesn't happen but that's going to be more of a concern this year."

Airways was working with airlines and airports to make sure that aircraft are held at departure points until there was clarity about their arrival slot to avoid planes being held at remote gates and passengers being bussed to terminals.

But there were signs the increase in capacity may taper off in the second half of the 2017 calendar year.

While there was no sign of a slow down in the number of new Asian international carriers coming to New Zealand, Sims said there were indications capacity in the domestic market may cool.

We've planned our resource lines and rosters to make sure that doesn't happen but that's going to be more of a concern this year.

"What we will see is Jetstar probably consolidate its regional operation and I expect to see capacity reductions in theirs and potentially Air New Zealand in response to them. One or other will realise a natural level in their capacity - I've always thought of New Zealand as a one and half regional airline market rather than a two regional airline market."

In May, Airways announced a 4.7 per cent price decrease for airlines over the next three year pricing period with general aviation prices maintained in line with inflation.

- NZ Herald

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