By Ilan Noy*
Earlier this month saw the 12th anniversary of the first major Canterbury earthquake on September 4 2010. Since that event and the catastrophic aftershock of February 22 2011, the Canterbury economy has proved quite resilient. So it’s a good time to ask where the region as a whole is heading.
This is especially important in light of plans by Christchurch Airport to build a new airport at Tarras in Central Otago.
This ambitious project has the potential to reshape Christchurch’s role in the economy of the South Island. And yet it remains unclear how much the Otago airport plans take the recovery of Christchurch into consideration.
Behind this lies the larger question of what happens to the Christchurch and Canterbury economies, now that almost all insurance claims have finally been resolved, houses have been rebuilt, and many (though not all) of the larger public infrastructure projects have been completed.
Helped by public funding worth many billions, the Canterbury economy grew rapidly in the years following the quakes. This isn’t unusual, as the flow of funds from insurance and government typically turbocharges the reconstruction. But this construction-based growth is not sustainable, and the real test is what happens next.
Will Christchurch emerge with an economy that was “built back better” to serve its residents, the South Island and Aotearoa New Zealand in general? Or will it slowly lose its economic vitality, now the large inflow of investment funding in reconstruction is petering out?
Crucially, where does the proposed new airport at Tarras sit within this broader perspective?
Why a new airport?
Christchurch International Airport Ltd (CIAL) is set up as a commercial enterprise, with 75% ownership by Christchurch City Holdings Ltd, the asset management arm of Christchurch City Council. The other 25% is owned by the Crown.
So it’s ultimately the ratepayers of Christchurch who must decide, through their elected representatives, whether it’s in their best interests to develop a new airport in Central Otago.
Does a Tarras airport make sense from a commercial, profit-seeking perspective? More importantly, will the airport development benefit the ratepayers of Christchurch, who ultimately own CIAL? To answer these questions, we first need to ask how the recovery from the Canterbury earthquake sequence is fairing in 2022.
One sector has dominated Christchurch’s economy since 2011 – construction. Not surprisingly, it doubled in size between 2011 and 2015 when reconstruction activity peaked.
Since then, however, it has been slowly declining (though it’s still about 20% larger than it was the year before the earthquakes). Now that a lot of the infrastructure in Christchurch is new, the city will need even less investment in construction than it did before the earthquakes.
What replaces construction?
The worry – one that has plagued many other urban recovery projects after large earthquakes – is that no other economic sector is taking construction’s place as the major source of employment and growth in the city.
The knowledge sectors (information technology, education, professional and scientific industries) have all seen a relative decline or have been stagnant in the past few years.
Tourism, accommodation and hospitality declined a lot after the earthquakes, and haven’t fully recovered. But they can be part of the solution to filling the emerging gap as construction activity unwinds.
It’s therefore important to understand how the plans at Tarras relate to these long-term challenges for the city. Will a new airport help fill that gap? Maybe, though the case has yet to be made convincingly.
One chief concern is that the other three airports in or near Central Otago (Queenstown, Dunedin and Invercargill) are not far away, are all centred around larger population centres and therefore cheaper to run, and are operating below capacity.
Other costs to consider
The future profits from a new airport, should they materialise, also need to be weighed against other costs – some of them borne much sooner. Climate change, in particular, is leading to a dramatic rethink of many lifestyle habits. And all the indications are that one of the first sectors this will test is long-distance tourism.
Barring a significant (and unlikely) increase in the number of long-distance tourists (coming maybe from the mega-cities of Asia), the project will only be profitable if it manages to divert traffic from the other airports in the South Island, and especially from Christchurch International Airport.
Christchurch Airport is the one airport in the South Island that already lets wide-body planes land, so it should be the one most concerned about competition from a Tarras airport with a similarly wide runway. Would CIAL be shooting itself in the foot by developing this new airport? If so, it would be the ratepayers of Christchurch who would be left standing unsteadily.
The most likely scenario is that a Tarras airport will not be a profitable asset for many years, due to the high cost of development and operation. It would also divert domestic and international tourists, and lucrative freight, away from Christchurch, thus hitting the city’s ratepayers twice (losing money as the owners of Tarras, and losing business as the owners of Christchurch Airport).
The airport is far from a certainty. As CIAL Project Director Michael Singleton said recently: “If the economic case doesn’t stack up, the airport won’t be built. On that basis, those who’re saying it’s nonsensical should be quite relaxed about our exploring it.”
But CIAL has already spent $45 million directly to buy the Tarras land, and more on other related expenses. Given the double jeopardy the project entails for Christhchurch’s ratepayers, it’s an open question as to how relaxed they will remain, especially given the upcoming local elections.
*Ilan Noy, Chair in the Economics of Disasters and Climate Change, Te Herenga Waka — Victoria University of Wellington. This article is republished from The Conversation under a Creative Commons license. Read the original article.
38 Comments
Within 5 minutes of that reading, you would discover that CIAL are 75% Chch council owned and 25% Crown. Let me guess, this came about after a senior management offsite. Newsflash, it is a catastrophically dumb idea and will never be started, let alone completed. $333 for every single ratepayer on a depreciating asset, dear god....
Will Wanaka airport ever be allowed to expand to handle narrow body jets? That question needs to be answered before investing in another airport 20km away. How much farming experience do CIAL have? That's the only thing they will be using the land for in the next 10 years if they are lucky.
If it goes ahead it will be a colossal failure.
It wont threaten the other airports at all. Who wants to fly from overseas, then drive for 90 minutes to Queenstown, 3.5 hours to Dunedin, or 4.5 hours to Christchurch, on windy, poorly maintained roads, in winter, and/or at night.
The most likely outcome will be that it is abandoned as per Welcome To The €1 Billion Abandoned Ghost Airport—That Just Received Its First Flight After Nine Years (forbes.com)
The Queenstown airport occupies some of the most expensive and badly needed land in the country. At some point the value of this land will mean the airport must shift. But to where?
Also as the article mentions Queenstown can’t take long bodied jets as the runway is too short.
The Queenstown airport occupies some of the most expensive and badly needed land in the country.
I would add that Auckland, Wellington and to a lesser extent Christchurch are all on more expensive land in places with more need. I mean it is a given that all the land occupied by airports is expensive and badly needed. After all, it is flat land in/or near large population centres.
Unlike the other cities though, the land under Queenstown Airport created it's own value. QT isn't a large business hub. So all those workers and their families that need housing, schooling, and shops... they are only required because of the tourists that the airport brings in. Remove the airport, and tourism will likely drop (If it hasn't already peaked), removing much of the need.
Exactly this. In addition to the other comments, the real cost would be building infrastructure to the towns/cities that the new airport is being built to service. And this infrastructure needs to be able to transport people safely and likely with low carbon emissions, particularly as we get lower carbon emissions planes landing. That's not driving.
So unless they are willing to stump up about $100-200 billion for high speed trains to Wanaka/Queenstown/Dunedin/Christchurch (which is still about 1-2h away with a high speed train), then why on earth would it be a good idea? Do people really think people want to land hours away from their destination? Even with a high speed train, if I was flying to Paris, would I accept landing in Marseille and getting a TGV?
Ridiculous boondoggle.
One chief concern is that the other three airports in or near Central Otago (Queenstown, Dunedin and Invercargill) are not far away, are all centred around larger population centres and therefore cheaper to run, and are operating below capacity.
What? How do you get that?
Has the author been to Queenstown? That airport has capacity issues as it is, I must say given it is the third largest airport in NZ in terms of international visitor numbers, I was shocked by how small it was. I think this market in particular is where the drive for Tarras is, given that Invercagill and Dunedin are miles from the tourism hotspots that the demand is meant to service...
Yeah but the answer to having all those airports far away from Queenstown isn't just to build another airport marginally closer.
Look at the QT airport on google maps. There's plenty of space around it, if you want a bigger terminal, build a new one on the SE side (if the terminal is the bottleneck). If you do this and knock down the other terminal, you probably have enough space to put in a second runway. The houses on the W side of the airport could be appropriated if it's not long enough and a cut and covered tunnel made like they have in Wellingtons southern side, the airport could extend right through the park to the shore of Wakatipu (obviously build another couple of tunnels for pedestrians to continue through.
Queenstown Airport isn't out of options, it just hasn't studied them enough and doesn't want to upset anyone.
You need 2.2km runway for wide bodied aircraft. Current runway is around 1.9km and can’t be extended. Second runway that runs at 90 degrees to the first is only for small aircraft as the remarkables / Queenstown hill are too close.
The current airport is right in the middle of frankton and aircraft noise can be heard in Queenstown/ up skyline etc, so noise restrictions limit the amount of aircraft traffic that is feasible.
These are the two main problems with the current airport.
You are right.
I have heard commentary in the media that the present airport does not really comply with its current use.
There are other problems. Getting fuel to Queenstown is difficult and expensive so many flights land heavily laden with enough fuel for the outward journey. this extra weight represents a loss of load capacity and the landings are very heavy and destroying the runway to the point that it needs rebuilding again.
Tarras is close enough to Christchurch to allow a return trip for a fuel tanker.
I suspect that long term, the growth of Wanaka will eclipse Queenstown so it is probably more appropriate at Wanaka, leaving Queenstown to being a smaller more expensive up market niche.
There may possibly be economically & logistically a case for an Airport at Tarras but why the hell should the ratepayers of Christchurch be responsible for the liability for it, a four hour drive away from its own urban area which is screaming out for major investment into basic infrastructure, plus the absolute wastage inflicted by the pathetic procrastination with the stadium. All the the funding to date has been borrowed and so too will need to be the remaining $billions to construct it. Here in ChCh we have council that is green mad, spending $millions on lavish cycle ways for a small percentage of its citizens, to create climate change.One councillor stridently claims spending $15 mill on a cycleway in Harewood will prevent shops flooding in Sumner 20kms away which has been caused anyway by the council themselves stuffing up new roading and requisite drainage. Yet this very same councillor was was one of four councillor signatures to Tarras? Ok then, not just those of Christchurch, but all New Zealanders,how much carbon tax is each of us now going to have pay to off set the carbon footprint for Tarras. The construction, concrete, ashphalt, steel, metals, glass, plastic, diesel, chemicals on and on and on and then the operational costs. Just think about it! The government announces a climate emergency in a great gush followed slavishly by the CCC and so how exactly do they justify this venture. The sheer hypocrisy is simply staggering! How come also, there is not one sq metre of strategic reserve land on this vast area, and why has there neither one question nor word of dissent been raised by the self proclaimed champions of climate change, NZ’s very own Green Party? Just on these grounds alone it cannot possibly proceed.
Short answer - no.
Long answer - definitely not.
Taking my tin foil hat out of the drawer (and being somewhat tongue-in-cheek here) surely this is only an idea so that:
a) The rich and famous/elite can have easier access to their South Island boltholes (maybe when the world turns to custard), or
b) It's there as a place to allow the United States and possibly Australia to launch bombers/fighter aircraft from in the event of a dust up with China down the track - kind of like the British building a new airport in St Helena at vast expense is probably just another backup option for keeping the Argentinians in check.
(removes tin foil hat)
As others have said, it's going to be a marginal gain at best versus expanding Wanaka - and at least with Wanaka there is already an established decent-sized town with all necessary ammenities.
If it does go ahead, imagine the carnage with weary travellers landing in Tarras, picking up the rental car and then driving across the Crown Range in possibly dark and inclement conditions.
Queenstown airport is downright dangerous. Its a bit like Hong Kong used to be. Dn can be dodgy in windy conditions too.
I predict that if Tarras goes ahead then around that airport a new town will emerge. Its kind of happening already with Wanaka expanding and Hawea expanding.
Long haul tourists would land at Tarras and some would go on to Wanaka/ Hawea, others to QT, others to Cromwell/ Alex. Great!
Chch, could remain as an int'l but Dn/ Inv would end up as domestic type airports. Thats fine too.
Yep if there’s wide body jets going in/out then each flight you’ve got circa 250-350 people heading to and from the airport. Either into Wanaka or down each side of Lake Dunstan. It’ll be a bloody mess. It was bad enough with the Cromwell crawl going into qtown each morning. You add a couple of large flights into the mix.
The appeal of the area has to have some degree of intrinsic value worth saving but I guess in this country short term greed trumps everything.
We are forgetting in important fact, if Christchurch didn't buy that land queenstown airport would have, there only other option is Kingston, sth of QTN, and then chc would loose the international wide body business, this is an excellent blocking move, and going through the motions, is more if a legal necessity than anything else
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