Business Central February 2021

40 | Hawke’s Bay Airport Richard Loader CALLUM SUTHERLAND Senior Project Manager Managing Director Tararua Construction Management PO Box 837 Masterton 5840 M. 027 229 8566 E. callum@tcmanagement.co.nz TCM Tararua Cons ement www.tcmanagement.co.nz 0800 182 182 www.turfrey.co.nz tenders@turfrey.co.nz Proud to partner with Hawke’s Bay Airport · PLUMBING · ROOFING · DRAINAGE · SEISMIC A s we thrust through the husk of 2020— which could easily be described as the globus annus horribiliis—never truer is the oft-said adage, ‘it’s not what happens to you it’s what you do about it that matters. For Hawke’s Bay Airport, the start-line has been about recovery, resilience and being a regional enabler. Stuart Ainslie, the Airport’s transformational CEO, says that it’s not just around aeronautical growth, it’s also about embracing the diversity of property and sustainability. “It’s starting to think about the whole of the airport business. “Core business is always going to be about landing airplanes and passengers, but regional airports have a lot of land they can leverage and create more resilience for the short term—or a pandemic.” Up till FY2019 the airport crossed 750,000 arrivals and departures each year, reduced by approximately 80,000 following Jetstars withdrawal of regional services in November that year. Then came the pandemic, drawing attention to how resilient a regional airport was or was not based upon a predominant airline. “We’ve realised we can go from 50,000 passengers to nearly nothing in the space of a month. “In 2017 we conducted an economic impact study that showed for every passenger $332 goes back into the regional economy, of which less than 3% is retained by the airport. When you’re sitting on 750,000 passengers that’s around $250 million into the economy.” During the whole of April 2020, the airport recorded 63 carpark transactions, 15 aircraft movements and 149 passengers—down from 1174 aircraft movements and just under 65,000 passengers the previous year. “Over a three-month period the loss of rev- enue for the airport was $1.5 million,” explains Stuart. “When we came out of the lockdown period heading into the June end of Financial Year we were planning to make a profit in excess of $1 million for the year. We ended up with a loss for the first time in the airports history.” For FY2021 the airport projected a loss of $1.5 million, however in the first five months of the new financial year there has been a much stronger recovery than expected both in passenger movements and car parking revenue. “We’re about 70% ahead in passenger num- bers and have revised our loss projections to be a third of what it was going to be at the end of the financial year. “In the first four months after Covid we saw more people wanting to get out and reconnect with family and friends. “That peaked and dropped off but we’ve seen that return again with people wanting to explore more of New Zealand. Business travel has just only started to bounce back after the August lockdown.” So with some semblance of a return to nor- mality in the horizon for Hawke’s Bay Airport, what does the creation of resilience look like? Stuart talks of a four-point plan designed to build diversity of business operations on the airport campus and resilience to whatev- er latent disruption might fester around the corner. Firstly, the airport is about five months away from finishing its new terminal expansions, which will provide more opportunity and capacity for amenities and passenger services for the generation of additional revenue streams. Secondly, aeronautical development re- mains the airports core business and Stuart acknowledges hard work is required to recov- er as quickly as possible in terms of planes and passengers. In discussions with regional stakeholders to unify the voice advocating Hawke’s Bay as a region, Stuart is confident about opportuni- ties for the region to attract new airlines and routes in the future. “I’m strongly of the opinion that we’ll see different types of aircraft emerge as the result of all the lessons from covid and also a much greater focus on climate and sustainability. “So that might drive a different kind of dynamic. We need to really look at how the region can market itself in a climate of re- gion-to-region travel. The third point is around resilience. The airport has a 230-hectare land-bank of which 70-hectares could be utilised for commercial development for transport logistics and sup- porting amenities. Some discussions are already underway and by March 2021 Stuart hopes a clearer roadmap will emerge. The fourth revenue stream that the Airport has invested energy around and is getting close to developing a tangible business case for is around renewable energy. “We’ve been looking at an on-site solar farm and during covid we ramped this up. We signed a joint venture with Centralines to explore a commercial grade solar farm. Our aim would be to sell energy back to the grid.” While Covid itself has not been the trigger for many of the initiatives it has underlined the need to build the percentage relativity of property versus aeronautical revenue. Resilience in the wake of challenges “In 2017 we conducted an economic impact study that showed for every passenger $332 goes back into the regional economy, of which less than 3% is retained by the airport. When you’re sitting on 750,000 passengers that’s around $250 million into the economy.” Stuart Ainslie The new terminal development at Hawke’s Bay Airport is on track to be completed mid-2021. REGIONAL DEVELOPMENT