Air Chathams to pay more in Whanganui but there’s a discount for biggest aircraft

Air Chathams will pay more to land at Whanganui Airport following an increase in aeronautical fees - the first rise since 2009.

The Whanganui District Council’s charges for the airline’s SAAB 340B will increase on June 1 from $111.90 to $174.92 per arrival, and then rise to $216.79 from July 1.

The airline’s chief operating officer, Duane Emeny, said he knew the changes were coming but, at a time when people were more conscious of discretionary income and what they spent money on, it “makes things even harder”.

He said the airline had dropped below the passenger forecasts it had made at the end of last year by between 5 and 10 per cent.

“Those were reasonably conservative numbers we came forward with, so not meeting them isn’t great.”

Emeny said he understood the Whanganui District Council was also facing cost challenges and it needed to look at its assets and services.

“Like all the airport users, we know the aeronautical pricing was low and needed to be increased, but we don’t feel the level of increase is ideal in terms of continuing what’s been quite a strong growth trajectory at the airport.

“If you jack the price up too much and people start not to do business there, you‘re on a hiding to nothing because you’re not getting those revenue forecasts you’ve based your pricing on.”

Increased costs would mean a smaller number of cheaper airline fares “to effectively increase the average fare cost across the flight”, Emeny said.

Airport fees are reviewed every five years, with the latest one in 2022.

A review in 2013 resulted in no changes and the review planned for 2019 was delayed due to the outbreak of Covid-19.

The airport is a joint venture between the council and the Ministry of Transport, so the aeronautical charges schedule - for 2023 to 2027 - needed to be signed off by the Government and that was done by Transport Minister Simeon Brown this month.

Rates for 2023 ($174.92) will apply only in June before year two of the schedule ($216.79) kicks in on July 1.

From July 1, 2025, SAAB fees will rise to $271.80.

Whanganui Airport chief executive Sarah O’Hagan said no one liked paying more but it had been 15 years since the last fee adjustment.

“We have also missed out on almost a year’s worth of increased revenue because of the timing of the minister getting to signing off [the fees].

“Users have had the benefit of 11 months of 15-year-old rates.”

She said the airport’s aeronautical charges for June would make up between 1 and 3.6 per cent of a typical Air Chathams Whanganui-Auckland airfare.

An information sheet the council sent to airport users this month listed Whanganui as having some of the cheapest SAAB 340B aeronautical fees in the country, despite the increases.

At the other end of the scale, the council said SAAB 340B flights into New Plymouth and Christchurch airports topped $700 in fees. Palmerston North was at $488.56.

Emeny said he did not think the council’s figures were accurate.

Air Chathams had invoices showing aeronautical fees for the plane in Christchurch at $258, New Plymouth at $190 and Palmerston North at $375, he said.

“We are very confident the rates we are being charged [at those airports] aren’t anywhere near what council has put forward.

“Our question is: ‘Where did you get those figures from?’ because they aren’t in line with what we are actually being charged.”

O’Hagan said the council got its information “from the publicly available websites for each of the airports”.

“Duane sent us some invoices that were just for landing and not including turnaround prices,” she said.

“Our comparison is for turnaround, not just for landing or just for taking off.”

Turnaround refers to passenger embarkation, take off, landing and passenger disembarkation.

Comparisons were also based on the assumption that 70 per cent of the aircraft was full, she said.

“Some of the invoices Duane sent - the aircraft wasn’t 70 per cent full.”

Emeny said the council was supporting Air Chathams to bring the 64-seat ATR aircraft in and out of Whanganui.

“We will only be charged as if it is a smaller SAAB, so that encourages us to bring that bigger aeroplane in. That’s definitely a good thing.”

O’Hagan said that arrangement would save Air Chathams $33,000 a year.

“They are bringing in bigger aircraft over the weekend and have been doing so since April.

“We are recognising the challenges they are facing and we are supporting that.”

Aeronautical charges currently met about 10 per cent of Whanganui Airport’s operating expenditure, she said.

The shortfall was funded equally by the council and the Ministry of Transport.

“By 2027 aeronautical charges will fund approximately 44 per cent of the airport’s operating costs which will reduce the level of funding required from ratepayers and taxpayers.”

O’Hagan said aeronautical charges contributed to the operating costs of the airport, not capital expenditure.

Mike Tweed is an assistant news director and multimedia journalist at the Whanganui Chronicle. Since starting in March 2020, he has dabbled in everything from sport to music. At present his focus is local government, primarily the Whanganui District Council.