Construction of Hawke's Bay Airport Ltd's terminal expansion is getting close, with negotiations on a potential tender for the work set to close within the next few weeks.

Significant growth in passenger movements over the past two years due to increased competition with Jetstar's arrival and Sounds Air now established at the airport, as well as Air New Zealand switching to larger aircraft, had put a strain on the existing terminal, said chairman Tony Porter.

The growth had also delayed plans for the planned expansion due to the need to re-design the "back-room" areas for the increased airlines' operations and staff.

"People have been getting a lower level of service in the terminal than we would have hoped, with restrictions on space and long queues for the cafe, but we are hoping to rectify that with the upgraded terminal," Mr Porter said.


The multimillion-dollar expansion would increase the terminal size from 2500sq m to 3800sq m, and would include check-in areas at the southern end of the terminal and a new automated baggage handling system at the opposite end.

There would be a dedicated arrivals gate instead of departures and arrivals from the same gate, and the new facilities would include a cafe for 110 people and offices for Air New Zealand, Jetstar and Sounds Air, which flies direct to Marlborough.

Mr Porter said people had been very understanding about the impact of the growing pains.

"People know what's happening and we have been very grateful at how accepting they have been of the service level while we await the new terminal."

As soon as a tender was confirmed, work would start soon afterwards, beginning with a temporary building for the baggage claim that would be located where the rental carpark was currently situated.

Mr Porter said that while the terminal was under construction, there would be a uniform charge for all car parks, in both the medium term and secure sections, in recognition of any inconvenience.

In the meantime, with the introduction of the competing airlines and passenger numbers through the airport reaching 652,000 over the last year, the company had reported a strong financial performance for the year ended June 30, 2017.

In the last year revenue grew to $6.1 million, an increase of 16 per cent on the previous year, and a record net profit after tax of $1.7m was achieved.


Mr Porter said the success of this result was partly due to the delay in plans for the new terminal, which had meant lower than anticipated interest to pay and not yet having to take up a loan to help fund the upgrade.

In its annual report, the only performance measure that was below the set target was the business park, which had not gone ahead as hoped, Mr Porter said.

"We are optimistic though that when the new Watchman Rd roundabout and entranceway is completed it will be more attractive for people to come out to the business park."