Auck airport outlines Guangzhou hub plan, targets Indians   1 Nov 2013

Article - BusinessDesk

Auckland airport outlines Guangzhou hub plan, targets Indian tourists

By Pattrick Smellie

Nov. 1 (BusinessDesk) – Auckland International Airport sees India as one of the most attractive sources of immediate growth in passenger arrivals and is planning to more than double last year’s 29,856 visitor arrivals from India by 2020.

In a 125 slide investor day presentation lodged on the NZX website, AIA also expands on its plans to create far deeper links with the airport at Guangzhou, the Pearl River Delta mega-city in China, where Southern China Air is headquartered.

Southern China Air began direct flights between Auckland and Guangzhou in 2011, which have grown from three to 10 services a week in two years.

The slides show AIA plans to make the national gateway airport a “southern link” inter-regional hub for Australia and New Zealand for flights between China, Australasia and South America, especially Chile and Brazil.

The strategy suggests a deepening relationship will emerge with Southern China, a Chinese government-owned enterprise that AIA believes could see Guangzhou experience explosive growth similar to that experienced by Dubai as it emerged to be a global aviation hub in the first decade of the century.

“We believe we will see that happen even more rapidly with Guangzhou and China Southern,” AIA’s
aeronautical commercial general manager, Glenn Wedlock, told BusinessDesk.

The airport dubs its strategy a “southern link” hub approach “building premium value positioning in Europe/Asia”, improving connections to growth markets in Asia and India through existing hubs in Kuala Lumpur and Singapore, as well as Guangzhou.

While Brazil is already a major destination for Chinese travellers, most of that traffic goes through the Middle East, said Wedlock, with the opportunity to create a new route to South America’s largest economy.

China Southern also operates an extensive domestic network in China and serves Asian destinations from Guangzhou.

Meanwhile, AIA is targeting growth in arrivals to be at 4 million a year by 2020, and has identified growth from the so-called BRIC emerging economies of India, China and South America as the fastest growing sources of new business.

Compound annual growth from India is projected under three scenarios to grow between 7.3 percent and 11 percent, “more than the US, UK, and Germany combined,” the AIA slides say, although total arrivals from those slower growing traditional markets would still outstrip Indian arrivals by 2020, even under the highest growth Indian arrivals scenario.

That scenario sees Indian arrivals growing from around 30,000 annually today to 69,000 by 2020, compared to 228,000 projected arrivals under the high growth scenario for British visitors and 256,000 on the same basis for American visitors.

Wedlock said AIA was not content with the traditional industry average target for New Zealand to grab around 1 percent of total global tourist travel annually and would push “aggressively” to outperform that rate of growth, although he did not nominate an alternative target.

China and Australia remain by far the most populous sources of new arrivals.

The airport says its overall target is a 14.27 percent average annual growth rate between 2012 and 2020, or 191.75 percent growth in arrivals over that period in total as part of its strategic mission to help grow both New Zealand tourism and the local economy.

The slides include analysis of the kinds of improvements that existing services between Auckland and major Indian hubs, with New Delhi and Mumbai by far the most common source of originating flights for visitors from India, with Hyderabad some distance behind.

New Zealand rated well for many of the top five factors shown by research to be favoured by Indian tourists: a safe and secure destination, world class beauty and natural environments, value for money, a romantic destination (important to the large honeymoon market), and family friendliness.

AIA shares rose 2 percent to $3.50 today.

(BusinessDesk)

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