Christchurch International Airport chief executive Malcolm Johns. Photo / Supplied
Christchurch Airport boss Malcolm Johns is prepared to play the long game with an ambitious plan to build an international airport in the Central Otago town of Tarras.
He's got about 250ha of land at Christchurch Airport that is yet to be developed, 80 years after it was bought.
"We're an intergenerational investor and land for us is always the first step," Johns said.
The 750ha airport site at Tarras — last reported population 230 and the home of Shrek the hermit sheep — has been bought from four landowners over the past nine months.
Christchurch Airport is 75 per cent owned by the city's council and 25 per cent by the Government and it has so far spent $45 million on the Tarras project.
That may the easy bit, as opposition is sure to grow and a lengthy consenting process looms.
"We're definitely focused on progressing the project but we're not going to do it in a way that crashes into people's communities — we want to take the time to talk," said Johns, who was forced to announce the project earlier than planned when it was smoked out by the media.
There is no business case yet and no drawings of the airport, which would have a 2200m runway capable of handling widebody jets.
''We're not going to advance final business cases until we've had the chance to talk to the people of Tarras and regions that surround Central Otago, Central Otago itself, iwi and gain an understanding of what the social and economic aspiration is in the next 50 years," Johns said.
"We're fully committed to seeing the project out but we're not getting ahead of ourselves."
A timeframe of five to 15 years was realistic for the project, he said, meaning it was likely to be a post-Covid build as tourism and aviation recovers.
In the meantime, holding costs were low for the land, now grazing sheep and cattle, and if the project did not go ahead, he was confident the company would not lose on a property deal.
Critics have raised concerns about the area's weather and the environmental impact of the airport.
Johns said Christchurch Airport had deep experience of operating in fog and strong northwesterlies. Building on a greenfield site also allowed new environmentally friendly technology to be adopted into airport buildings.
Airlines have welcomed the proposal. Air New Zealand has long voiced concerns about congestion at Queenstown, which is about 90km from Tarras, and the need for a lower South Island alternative, which was the final spur for the Tarras proposal. Airlines would love to see competition between airports, which are usually spaced much further apart.
Johns says it would be up to the airlines to determine what sort of aircraft they would use at Tarras, primarily a domestic or short-haul international airport.
But the widebody planes that could be handled on the 2.2km runway could be more efficient than single-aisle aircraft. And a longer runway means less-steep climb rates after takeoff, using less fuel.
Queenstown Airport has paused planning for its long-term future but is sensitive to any rival airport development in the region. Its part owner, Auckland International Airport, says the area is already well-served.
Johns says he hasn't spoken to Queenstown Airport but it's not a case of one or the other.
"Queenstown Airport is established, there is always going to be a demand for that location. In none of our modelling have we assumed that Queenstown Airport disappears — it's a decision for them and it's not a conversation we're involved in. There will be a lot more opportunity if everyone keeps an open mind."
Johns says the Tarras plan can trace its origin to the 2011 earthquake.
Traffic volumes to Christchurch sank for several years after the quake, as was the case throughout the South Island.
"We learned two things: infrastructure capacity is essential for the South Island both in terms of high-value freight and for the tourism market."
He said the second thing the company learned after the earthquake was that high-consequence events happen, and it began preparing the business for another event before 2025.
The scenarios included the consequences of an Alpine Fault earthquake, a global pandemic and a global financial crisis.
"We worked through the process of asking ourselves if an event like that happened, how do we navigate it in a way that we could continue to prosecute our strategy for up to two years with less than 50 per cent of our income."
When Covid-19 hit, it didn't stop Christchurch from progressing the Tarras initiative because it had prepared the business for it, Johns said.
The airport briefed its owners about the Tarras plan and has spoken to the Ministry of Transport.
However, it didn't need any special approval as the work was done within its standalone commercial structures.
The company spends about $80 million to $100m a year on property development.
Māori Point Vineyard is near the site of the proposed airport. Vineyard co-owner Marilyn Duxson said the plan had been talked about for some time but its announcement came as a jolt.
She said while there could be positive spin-offs for local businesses, it could shatter the area's peace and quiet and she worried about the environmental impact of the airport.
"It seems to be a weird time to be building an airport at a time of Covid. I can't say that we're keen on it with planes landing across the road."
Duxson said the small community would meet before a planned meeting with Christchurch Airport bosses.
Queenstown Lakes District Council mayor Jim Boult is a former Christchurch Airport chief executive and said the Tarras announcement was a surprise.
"I regard it as a strong vote of confidence in the future recovery and prosperity of our district and the central and southern parts of the South Island sufficiently to make such a significant investment. The proposed runway length is interesting, in that it is close to that required for a widebody jet service. Some in our community have signalled strongly that they do not want such a development. As I know very well from my time in the airport industry, purchasing land is only one step in a very long process of developing a greenfield site airport."
Queenstown Airport Corporation chief executive Colin Keel said: "While we will be interested to see how Christchurch's Airport's proposal progresses, Queenstown and Wanaka airports are and will remain vital air transport infrastructure assets that are uniquely positioned to serve the needs of the community and connect people to our district and broader region."
Auckland Airport: "The lower South Island is currently well-served by a number of regional airports, each playing an important role in supporting local communities and economies. Auckland Airport remains confident in the long-term future of Queenstown Airport as a critical piece of infrastructure in one of the country's most popular tourist destinations."
Board of Airlines Representatives executive director Justin Tighe-Umbers said the plan was positive and a clear vote of confidence in the long-term future of aviation for New Zealand.
"The current Covid-19 pandemic will pass, but demand for visitors to the South Island will continue to grow. Pre-Covid, airlines could fill every aircraft going into Queenstown, and that was starting to approach its limit for flights. Adding in extra capacity would be a major boost to the local economy, and New Zealand's aviation network."
Air New Zealand's chief operating officer Carrie Hurihanganui said the Tarras plan deserved consideration.
"Current population and growth projections suggest that existing airport infrastructure in Queenstown is insufficient for the long term and will eventually exceed its capacity limits.
"The Southern Lakes region is the jewel in New Zealand's tourism crown and it is crucial that infrastructure – including airports – is aligned with population growth, community needs, and New Zealand's future tourism aspirations post Covid-19."
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