A three-year pause gave the airport an opportunity to revisit assumptions. Photo / Supplied
Auckland Airport has started work on a $2.2 billion new domestic terminal that will be under the same roof as the international terminal.
With associated projects the total cost could reach $3.9 billion, making it one of New Zealand’s largest-ever infrastructure projects.
The new building will sit at the eastern end of the international terminal and cut transfer times between international and domestic flights to a five-minute walk.
Auckland Airport chief executive Carrie Hurihanganui says, “the worst kept secret in New Zealand is that we needed to replace the old domestic terminal.
“It’s almost 60 years old and close to capacity. We’ve been talking about replacing it for 12 years.”
Indeed, if it were not for the Covid-19 pandemic, construction work would already be well underway.
The airport previously announced it was ready to start work on the terminal in early 2020.
Hurihanganui says: “It was all-go in February 2020, but by the end of March we needed to pause which was the prudent thing to do.”
A three-year pause gave the airport an opportunity to revisit assumptions. The underlying argument in favour of the project hasn’t changed.
“It allowed us to reconfirm that an integrated terminal is the right thing to do both from an efficiency and customer experience or proposition perspective. And that the eastern end of the international terminal was the right place to do that.”
The main change between February 2020′s plan and today’s is the acceleration of sustainability.
“It’s not a new topic. Sustainability has been there for a long time,” says Hurihanganui. “But it has accelerated maybe tenfold over the Covid period. There is the consideration of how we facilitate that for ourselves and how we help the industry fast-track its emission reduction pathway.
“For us, it is scope one and two emissions; we need to be clear what we are doing in our own controllable elements. Then we have a role to enable airlines with scope three. We have to provide a facility that will help them meet their aspirations and serve the low emissions aircraft when they arrive.”
Among other sustainability-focused changes, the airport is building more renewable energy including solar panels on the roof of the new transport hub and shopping centre. There has also been work on looking at the construction materials being used from a whole-of-life perspective. The airport also has a target of reducing waste to landfill to 2019 levels by 2030; and reducing potable water use by 20 per cent.
Airlines, cargo and baggage handlers are moving to electric power ground service vehicles, which require charging facilities across the airport.
Likewise, aircraft now use electricity while they are on the ground to keep the lights on and power air conditioning without burning fuel. The airport itself is switching from using fossil fuel-based heating and cooling.
Hurihanganui says the climate has been a priority for years now.
“As more information comes to light it has become more urgent.
“We set targets to be net zero carbon by 2030. Auckland Airport has a clear pathway to scopes one and two. I’m confident we’ll deliver, but the big question is scope three.
“How do we support airlines so that our collective ambition to reduce emissions are addressed? We hear airlines talking about low-carbon aircraft technology, which can be electric aircraft, hydrogen or hybrid. They talk of sustainable aviation fuel; we would be an infrastructure supplier of that.”
The airport is building options to support these future aviation technologies in its infrastructure design.
That means questions about the electricity grid and other elements that will need engagement with the government and other authorities along with broader ecosystem changes.
Moving from two terminals to a single building helps with sustainability.
Hurihanganui says that the main consideration about whether to opt for separate or integrated terminals is always going to be customer demand and then designing things to IATA (International Air Transport Association) standards.
“Then you get into things like the efficient use of resources. Having two different buildings is fundamentally different to an integrated area. There are efficiency and productivity benefits but what starts to really drive that is utilities: air conditioning systems, digital systems and so on.
“When you have two separate buildings, you can’t share those. You’ve got two separate systems.
“While having an integrated building gives customers a better experience, it also improves efficiency and makes for more effective running costs. It’s not just cost-effective for the airport, we must think about the airlines, about the border agencies, the food and beverage outlets and the retailers.”
Hurihanganui says travel patterns haven’t changed fundamentally since Covid. “They slowed down at first, then there was an initial bounce back before Auckland’s borders were closed again.
“Now it is ramping back up. The mix between business travellers and leisure travellers is much the same as it was. Domestic travel is now sitting at about 89 to 90 per cent of pre-Covid levels.
“Air New Zealand is largely back to where it was, and Jetstar continues to grow. Historically about 20 per cent of domestic air travel was from international visitors. We think it will take a little longer to get that last 10 per cent back, the return of flights from China will be part of that.”
The airport forecasts that when its financial year ends in June, international passenger numbers will be at 90 to 92 per cent of pre-Covid levels. It will be 2025 before domestic travel gets back to 2019 numbers.
The intent of travellers passing through the airport is now heading back to pre-Covid patterns after a period where there was a huge pent-up demand of people wanting to visit family members immediately after the border reopened.
Many airlines have returned to Auckland Airport although there are fewer flights from mainland China than in the past thanks to that country being locked down longer than many others.
Hurihanganui says demand is ramping up again. Some of the aircraft that were parked during the peak months of the pandemic are back, but possibly with a different mix of specific plane models.
“We are seeing airlines choose the right aircraft for each route, that’s both for passengers and cargo demand. We are seeing the A380s return and the 777s, particularly for long-haul flights.”
Another change from the airport’s pre-Covid expansion plans is the way projects are being sequenced after a three-year pause on the major terminal investment.
In 2020, the airport expected to start work on the terminal integration project before beginning the transport hub project.
The airport took the opportunity to work on its roading network while passenger numbers were low to minimise the disruption.
“It’s a lot easier to do the roading work when there aren’t many cars or passengers around. It means a lot fewer orange cones for people to navigate.
“We tried to get the most disruptive elements of the work done while there was less activity, although we had to balance this for a while with the fact that we didn’t know when borders would reopen.
“The transport hub is well advanced. The pick-up and drop-off area will be open by the end of this year and the hub will be completed by the end of next year.
“The progress on sustainability has changed some of the projects. We will incorporate more of this into the integrated terminal and we are now including renewable energy. There will be solar panels on the roof of the transport hub and shopping centre”.
In 2019 Auckland Airport commissioned a climate change study to understand its risks, including the risk of flooding, and being on low-lying land next to the sea, the risk of inundation. The indicators at that time were that the airport would be largely fine until the mid-2040s. Then on January 27 the city was significantly affected by a storm that saw widespread flooding, including the airport’s international terminal.
Hurihanganui says the airport started to incorporate stormwater and seawall upgrades as part of the maintenance programme during the pandemic.
The aim was to have the stormwater prepared by the end of the 2020s, well in time for the 2040s. “We started action before the recent events. Those events reinforced our understanding that we were on the right path and that we need to get on and do it. We need to ensure that we have the safe and resilient airport we want.”
There is a plan for a second runway at Auckland Airport. It has moved down the priority list since the Covid pandemic because an investment like that would depend on demand. The design concept for that runway is to build it between 9.5 and 15 metres above sea level, that’s considerably higher than the existing runway.
One challenge for Hurihanganui is for the project work to take place while the airport continues to function as normal.
She likens that to changing a car’s tyre while it is still moving. She says the airport used the pandemic slow down to get ahead of some of the most disruptive work and much of the enabling work, but she is aware that people were often anxious about travelling before Covid, and with the effects of that and the development, it means the airport has a huge communications task in front of it.
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