Auckland Airport hails new air-service arrangement with China

17 April 2012

Auckland Airport hails new air-service arrangement with China

Ministry of Transport negotiations secure much needed headroom for tourism and trade growth

Will help drive New Zealand’s ambitious trade and tourism targets with China

Auckland Airport today congratulated the Ministry of Transport on successfully negotiating a new air-services arrangement between New Zealand and China.

The new arrangement means that the constraint on growth in flights between New Zealand has now been tripled to allow up to three flights a day, each way, by each nation up from only one daily flight each way by each nation under the old arrangement.

The old agreement meant that New Zealand could only provide rights to an airline for seven flights a week between the two countries, and China the same.

Auckland Airport’s general manager corporate affairs, Charles Spillane, said, “With China Southern Airlines already flying daily, and with Air New Zealand flying between five and seven times a week, depending on the season, New Zealand’s economic growth potential was being constrained. This announcement offers a major medium-term opportunity for New Zealand to achieve some of its big tourism and trade goals. The work of Minister Brownlee and the Ministry of Transport’s negotiation team has been pivotal in balancing all of the various interests and achieving the best outcome for the country.”

China has for the last few years been a key focus for New Zealand tourism and trade interests, both in the public and private sectors, for example Auckland Mayor Len Brown is currently leading a large trade and business delegation to China.

Building more connectivity to the key trade and tourism markets of Asia is vitally important for New Zealand. Mr Spillane said, “The size of the China market opportunity, and the projected growth, is simply extraordinary. And there are other markets such as Indonesia, Vietnam, India, and Brazil that are also experiencing phenomenal growth. The focus is there – for example Immigration New Zealand has made major improvements to immigration processes, Tourism New Zealand has beefed up their efforts in China, and New Zealand Trade & Enterprise have launched a major China strategy to support the free trade agreement. On the private sector side, a host of companies, including Sky City, Fonterra, Air New Zealand, Comvita, Fletcher Building, Nuplex, F&P Healthcare, and of course Auckland Airport have all made business moves in China.

“While this is a huge step in the right direction, we are certainly not the only ones to recognise the importance of opening up more connections to the Chinese market. Australia already has around 10 times as many air-connections to China as New Zealand. In fact, China Southern Airlines’ president, Si Xianmin, was recently quoted as planning to increase weekly flights from their airline into Australia from the current 32 to 110 by 2015 – that’s just for one airline. This highlights the growth potential from China.”

“Having a higher ceiling on air-rights is an important part of the sales process,” said Mr Spillane. “Committing to a new or expanded air-service as part of a global network is a major decision for an airline. As well as needing confidence in the business case and the market opportunity, they need confidence in the policy environment, including the availability of air-rights. This announcement will give them that confidence.”

“The projected growth out of China is such that each of the main Chinese cities offers a significant long-term market opportunity for airlines - there is more than enough market to go around. With this new arrangement in place, we are confident that the strong growth in travel and trade we have experienced in recent years between China and New Zealand will continue. We look forward to further improvements in the arrangements in 2014 when the officials next meet.”

For further information, please contact:

Richard Llewellyn
Corporate relations manager
+64 9 255 9089
64 27 477 6120