Start date for airport’s new terminal build
Passengers through Palmerston North Airport are in for two years of disruption as the airport company embarks on a $40 million project to build a new terminal onsite.
Final details of the design and contract are still to be confirmed, but chief executive David Lanham said the plan was to start demolishing the western end of the building in September.
The current 30-year-old building had seismic issues, which a strengthening project alone would not be able to resolve.
The new building would also include passenger and carry-on bag screening, which was expected to become mandatory for regional airports.
The area available for use during the first stage of rebuilding at the western end would be reduced to less than half of the current 4400m² area, with activity condensed into half the current baggage claim hall and the valet parking area.
Enabling works were expected to start in July this year, with completion of the rebuild in September 2026.
The airport company was not asking Palmerston North City Council as sole shareholder to pay for any part of the new building, but had signalled it could need to borrow extra money to pay the council a dividend of about $150,000 in future years.
The investment would also constrain its ability to develop the Ruapehu Aero Park, where there were opportunities to diversify its income, but it could not afford them while borrowing to pay for the terminal.
While movement through the terminal was expected to be disrupted during the rebuilding, the car park experience would be improved. Covered drop-off and pickup areas had recently been completed, and there were plans to invest about $4.9m in further improvements – including covered walkways to shelter people between the terminal and the long-term car parks.
Another emerging trend that could relieve pressure on the constrained terminal space was the outlook for subdued growth in passenger numbers.
In the six months to the end of December, the number of passengers through the airport was 283,914, which was more than for the same period a year ago, but down 3.8% on what was forecast. The number now expected for the full year was 551,000, down on the 581,100 anticipated.
Lanham said the company had “de-tuned” expectations for future growth in passenger numbers by the end of the June 2027 year from 600,000 to 575,000.
The constrained growth was partly because of flight capacity, but it was also likely to be affected by recent fare increases announced by Air New Zealand.
Mayor Grant Smith described the terminal building project as the biggest capital development in a generation for the airport. He said it was the last regional airport to put in security, and the need to invest on both sides of the building was essential.
But two councillors did not support the airport company’s plans. Brent Barrett was disappointed there was no commitment to ensuring the new terminal building met full green building standards.
Airport company chairman Murray Georgel said the board had asked for the building to be as “environmentally responsible” as possible, but would not insist on meeting full green building standards because of the additional costs.
And Barrett said it was good news that on latest estimates the number of passengers flying would be lower than earlier forecast. “I personally think that is good news for the environment.”
Until there were low-emission aircraft flying, people should fly less, he said.
Georgel said the company was keen to work with Air New Zealand on electric aircraft, “but we are a very small operator and don’t have a lot of leverage”.
Councillor Karen Naylor said the airport should be diversifying its income and returning a dividend to ratepayers rather than investing $4.9m in covered walkways.