Speech to the Board of Airlines Representatives New Zealand
I'd like to welcome you to Parliament tonight and say a few quick words on how important your industry is to New Zealand.
New Zealand is a small country a long way from our trading partners and potential visitors, which makes our transport connections so important.
It's essential to the government that we have an efficient and safe airline industry. We rely on you to:
•connect us with the world
•to bring in tourists
•for imports and exports;
•and to connect New Zealanders within our own country.
It's also worth noting that the aviation industry in New Zealand is a major economic player in its own right.
A recent report from New Zealand Trade and Enterprise shows that aviation contributed around $9.7 billion to our GDP last year, representing 6.9% of the whole economy.
It employs over 23,000 people and has grown on average 9.5% over the last five years.
This is a great achievement given the enormously challenging environment you operate in.
The global recession has had a major impact on the number of passenger numbers around the world, and of course security issues are always prominent.
I'm glad to report that New Zealand's visitor numbers have held up reasonably well though.
I'm also glad to report that the government is investing more in promoting New Zealand overseas.
The Minister of Tourism, who also happens to be the Prime Minister, announced $30 million in new funding in this years budget. Most of this will go into overseas marketing, with Australia as one of the key targets.
Next year we are expecting around 85,000 visitors for the Rugby World Cup, which will be a huge event for New Zealand and your industry.
Something many New Zealanders may not realise is that in those two countries, Rugby Union is largely a middle and upper class sport. Many visitors are likely to be high-income earners and keen to explore New Zealand's culture, scenery and cuisine.
In terms of government policy affecting your industry, there are a number of issues that we've been discussing. I won't go into detail on all of these tonight, but I would like to quickly outline a few recent initiatives that are good news for airlines.
I know that airport pricing is a major issue for your organisation. The Commerce Commission is consulting on this, which will be the final step in consultation before the input methodologies for airports are finalised.
Thank you for the input that BARNZ and member airlines have had into this process, and I look forward to seeing the results.
Another issue on your radar will be the proposed merger of trans-tasman services by Air New Zealand and Virgin Blue.
The Ministry of Transport is continuing to evaluate the proposal, including conditions that have recently been proposed to the Australian Competition and Consumer Commission.
The Ministry will evaluate the application using statutory and public interest criteria before reporting to my colleague Steven Joyce, the Minister of Transport, in due course.
The New Zealand and Australian government are making good progress on streamlining our borders, as agreed by Prime Ministers Key and Rudd in August last year.
Both countries are committed to the eventual goal of a common border between our countries, but in the short term the focus is on continual improvements.
SmartGate is now in place for passengers arriving at Auckland, Wellington and Christchurch airports, which is proving very popular with passengers.
By the middle of next year we intend to have SmartGate in place for passengers departing from those airports as well.
There is discussion on how to further expand this scheme to improve the passenger travelling experience, so watch this space.
Work is also underway on x-ray image transfer, which means that luggage can be reviewed by Biosecurity Officers while an aircraft is en route to New Zealand.
The majority of trans-Tasman passengers, who generally don't have risky goods in their bags, will be able to leave the airport more quickly. We expect this will begin next year.
In the meantime, we already have low-intervention lanes operating at Auckland and Christchurch airports.
Earlier this year the government was pleased to be able to reduce the international aviation security charge paid by out-bound airlines.
This is being reduced from $15 to $10 per departing international traveller, while the charge for domestic travellers dropped slightly from $4.66 to $4.35 (including GST).
The Aviation Security Service had built up large surpluses from this charge since it was last increased in 2007. By the end of March this surplus was sitting at close to $35 million from international security charges, and $6.5 million from domestic charges.
This level of surplus was unfair on airlines and the travelling public. It's not very often the government can reduce a charge of this kind so I'm pleased we've been able to do this.
The other bit of good news in recent months has been New Zealand formally signing up to the Cape Town Convention and the Aircraft Protocol.
This comes into force on the 1st November, and will reduce the cost of financing for companies purchasing and leasing aircraft.
This is great news for the airline industry and the benefits will be in the millions of dollars.
Overall, I believe your industry has an exciting future.
What the last few years have shown is that the aviation sector is resilient, and as the world economy improves we will see even more opportunities opening up.
I look forward to building on the good relationship you have with the government. Enjoy the rest of the evening.