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The airports of New Zealandmore than just pretty runways Simon Moutter

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Safely and efficiently processaircraft and people movements?

or to ……..

Do New Zealand airports exist to

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Grow travel, trade and tourism for New Zealand

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Between us, we;• Welcome and farewell

over 99% of international travellers to our country

• Contribute directly to around 20% of New Zealand’s GDP

• Impact the travel service experience over 25 million times a year

• Can materially impact the recovery from the recession

We have a collective influence

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NZ Inc needs airports to reset their purpose towards growing travel, trade and tourism

Volume is our shared

value-driver

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Holiday travellers to New Zealand have not been growing

The cold hard facts

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16 airlines fly into Melbourne or Brisbane that don’t fly to NZ

The cold hard facts ….

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We have not participated in worldwide air cargo growth

The cold hard facts

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 20080

20

40

60

80

100

120

140

160

Cargo/Freight growth 1998-2008

World Air Cargo NZ Sea Freight AKL Freight

Source: Annual Report, Boeing World Air Cargo Forecast, Statistics New Zealand, UN WTO Website “Tourism Highlights”.

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The cold hard facts New Zealand’s share of high spending traveller markets is softening:

• Japan market travel declined by 43% in 4 years

• South Korean visitor spend down 22.8% in last year

• UK visitor spend down 18.6% in last year

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The cold hard facts Australia has 162 more flights per week from Singapore.10 times NZ3.4 million extra seats.

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We face incredibly tough competition for tourism growth from other markets – like Australia

The cold hard facts

Australia is much more ambitious for growth out of Asia

Australia is more bullish on US growth

NZ focused on Australia

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The industry sectors we work within think we are fat, lazy monopolies

And worse,

And policy makers mostly sympathise with them

“Airport companies exist for the sole purpose of extracting money from airlines and the public – profit for shareholders above all else ..... The rampant greed wouldn’t be so bad if it were at least accompanied by some kind of ‘pleasantness’ ..... (instead of) haughty demands – all perfectly legal of course – from the unassailable position of the arrogant monopolist.”

Rob Neill – Pacific Wings Editor August 2009

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Time to make a bigger effort for New ZealandTime to improve our messagingTime to sit at the top tableTime to reset our strategies and prioritiesTime to invest our money in promoting travel, trade, and tourism

It’s time for change

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4P’s of Marketing

4P’s Ability for Airports to Impact

Current Impact of Airports

Product High Medium

Price Medium Low

Placement Low Low

Promotion Medium Low/Nil

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• Good, better, best choices for everything we sell

• End-to-end airport service experience highly managed and consistently outstanding

• Uniquely kiwi and uniquely regional branding evident

• Freight forwarding facilitation needs to be much more competitive with modal alternatives (e.g. fast shipping)

Product – lots of ways to improve

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• Relentless growth in per pax aero charges needs to stop

• Good, better, best price choices for differentiated service offerings need to be available

• Airports can work to reduce the end-to-end costs that airlines, trading businesses and travellers incur

Price – it’s not just about aero charges

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• Pax volume is our biggest value driver (and NZ Inc’s) so it makes sense to invest in promotional activity

• Air services development is costly and complex so the airlines need our help

• Tourism industry spend is brand focused from the centre and fragmented from the regions

• Airports need to put some money up and get a seat at the top table to better influence the targeting of promotional spend

Promotion – put some money on the table

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• Keep 3 carriers on the key domestic routes and grow regional services

• Become more influential in tourism industry policy settings• Widen the central Government tourism promotion marketing mix to

incorporate air services development funding support• Get airline costs in relation to airports tracking downward• Deliver best-in-class, uniquely-Kiwi service experiences to all

travellers at our facilities• Build a seamless nation-wide and international air freight

proposition that gets tonnage onto a double digit growth trajectory• Sustainably grow passenger volumes at more than 2x GDP growth

Some outcomes to target

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Questions