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NZ Airports highlight domestic fare rise

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The New Zealand Airports Association has raised concerns over a rise in domestic air fares during the last three months of 2019, commenting that increased fares lead to “fewer people able to travel.”

According to inflation data shared by Stats NZ the cost of flying within New Zealand rose over the December 2019 quarter, with domestic airfares up 12%. Prices rose for many regional routes, as well as between main centres. Though, the analysts said domestic airfares do usually rise in December quarters.

The New Zealand Airports Association (NZ Airports), an association representing a network of 41 airports across the country raised concerns however, and said the rise will cost passengers an extra $165 million for a full year and will mean a passenger is paying $14 more for their flight, on average, compared to the same period 12 months ago.

“Families, businesses and tourism will be the losers from the big jump in flight costs” said NZ Airports chief executive Kevin Ward. “Increased fares translate directly to fewer people able to travel.”

“Domestic air fare increases on this scale are many times greater than the rate of inflation, and have a choking effect on regions at a time the Government is investing in provincial economies,” he said.

The increase coincides with Jetstar’s withdrawal from regional routes, the association said, and the agreement between Air New Zealand and Qantas to co-operate in each other’s domestic markets.

Air New Zealand, meanwhile, released a statement highlighting that it had decreased its lowest fares on 41 domestic routes in February 2019, reducing some by up to 50%.

The airline announced last February that it would move to shrink fares to make travel more affordable and aiming to boost domestic tourism.

Air New Zealand’s Chief Revenue Officer Cam Wallace said the response to the reduction of the airline’s lowest fares has been well received, “When we announced this overhaul in February last year, we committed to making three quarters of a million seats a year available for less than $50. It’s terrific to have well and truly surpassed this and to hit the one million milestone.

“Around 600,000 of these fares sold for under $50 have been for flights on our regional routes,” he said.

“We remain committed to delivering great low fares for our customers,” Wallace assured, but added that customers must book early as “they’re in hot demand.”

SBD airport

Construction begins on SBD Airport’s new cargo facility

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Construction has begun on the development of a new cargo facility at San Bernardino International Airport after the final ground lease was approved for the Eastgate Air Cargo Facility project by the airport authority.

Located at the airport, the project is part of the airport’s master plan to revitalise the former Norton Air Force Base which was shuttered in 1994 and will support additional air cargo.

Efforts to revitalise the base led to AllianceCalifornia, the master plan to help the airport and surrounding region to prosper, aiming to bring sustainable economic revitalisation to the communities affected by the base closure. It is a public-private partnership between the Inland Valley Development Agency, SBD International Airport, and Hillwood, an estate development company.

The alliance celebrated the milestone after the San Bernardino International Airport Authority (SBIAA) Commission approved the final ground lease, giving the go-ahead for construction to begin on the cargo project.

“Since 2002, AllianceCalifornia has created over 12,645 permanent jobs, surpassing the 10,000 jobs that were lost when Norton Air Force Base had to close its doors,” said SBD International Airport’s Executive Director Michael Burrows. “Almost 20 years in the making, this Eastgate project is an incredible chapter in our public-private partnership with Hillwood. On aeronautically-restricted property, this was one of the more challenging yet truly vital elements of our multi-year revitalization efforts. It is a major step towards innovating a green, sustainable air cargo complex that flies and drives our economy without the use of public subsidies.”

The facility will feature a 658,500 square-foot building and two 25,000 square-foot maintenance buildings and 41 acres of new aircraft ramp. It is expected the facility will see 12-daily flights during the first year and 26 daily flights by year five.

Eastgate will utilise environmentally friendly practices, incorporating energy-efficient green buildings, electric vehicle charging stations and electric aviation ground support equipment. The project will also underground existing overhead power lines – decreasing fire hazards.

“Sustainability and job creation are at the core of Hillwood’s values,” said Hillwood Senior Vice President John Magness. “In partnership with nine highly-skilled labor unions, Eastgate will demonstrate the economic potential for environmentally responsible air cargo facilities at AllianceCalifornia.”

New roles created at Eastgate will include new aviation-specific occupations. The Inland Empire Economic Partnership (IEEP) which focuses on economic development in the region supports AllianceCalifornia’s efforts, with IEEP President and CEO, Paul Granillo commenting: “The logistics industry has fueled the Inland Empire’s spectacular recovery by generating an estimated 84,000 new jobs – that’s nearly one out of every four new jobs – over the past 10 years. Eastgate will continue to grow the region’s economy in air cargo, so we can work closer to home and create good jobs for workers of all skill and education levels.”

The Commission’s decision concludes a multi-year environmental and community review process and follows the Federal Aviation Administration’s Record of Decision of a Finding of No Significant Impact on the environment.