Justin Lester: New Singapore Airlines route 'opens Wellington's front door'
OPINION: The announcement of a new airline service to Singapore via Canberra will be a boon for Wellington offering cheaper travel, time savings, more efficient freight transportation and more visitors to the capital.
The route will be the most direct connection between Wellington and Asia and shows increasing confidence in the Wellington market. Singapore Airlines has serviced Auckland for 40 years and Christchurch for 30 years. They are one of the world's most awarded airlines and have a reputation for longevity.
Aviation commentators have broadly acknowledged that increased competition will stimulate fare price reductions and larger numbers of travellers, which has been demonstrated already.
On the same day Singapore Airlines' tickets went on sale, Qantas offered reduced fares from Wellington to Singapore, Bangkok, Hong Kong and Shanghai for $799. One week later, Air New Zealand also signalled fare reductions.
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This is exactly what we want and is one of the reasons Wellington City Council has agreed to provide marketing support for the service. We want to market Wellington to new catchments. We want planes that are full with prospective residents, international students participating in our high quality education system and tourists spending in the city. The anticipated benefit is $95 million in visitor expenditure and $44m added to the economy, which will support local jobs.
I want to be quite clear; the marketing support is not new spending. It comes from an existing budget for Destination Wellington projects. Destination Wellington is part of the council's economic development strategy and aims to attract business, talent and investment to the Wellington region. The strategy was conceived in 2012 in response to concerns about the then slow local economy and perceptions the city was dying.
Following extensive consultation in the council's 2012 long term plan, council allocated $1m in 2012-13 and $1.9m a year from 2013-14 to implement the strategy. Council agreed to allocate $650,000 to Positively Wellington Tourism to market to domestic and international markets, growing to $875,000 a year from 2013-14. We provided Grow Wellington, the region's economic and business development arm, with $300,000 in 2012 and $900,000 from 2013 and tasked it with attracting migrants and new businesses.
The funding was signed off in a unanimous vote by all Councillors.
Regarding the question of the make-up of funding for Destination Wellington projects, it is paid by groups relative to the proportion they are likely to benefit. The downtown levy, which is paid by CBD landowners to drive business and tourism, provides 50 per cent of Destination Wellington's funding, with 30 per cent coming from general commercial ratepayers and 20 per cent from residential rates. In other words, the sector that benefits the most is providing the largest share of investment.
If we look across New Zealand, Auckland and Christchurch City Councils have made substantial investments to attract new airline services. Auckland has commenced services to Buenos Aires, Beijing, Houston, Manila and Dubai. Auckland partners with its economic development agency ATEED, Auckland Airport and Tourism New Zealand, which provides central government contributions. Christchurch City and its 75 per cent owned subsidiary Christchurch Airport provided marketing support for China Southern Airlines to commence direct flights into the Garden City from December 2015.
To successfully get new services Auckland, Christchurch and Wellington airports also provide support to airlines via reduced airport charges and marketing support. In the last financial year their regulatory disclosures showed Auckland Airport's incentive payments totalled $5.2m, Christchurch Airport's $2.5m, and Wellington Airport's $1.6m.
I'm proud to support our investment. We could choose not to do it, but Wellingtonians would miss out. The benefits are clear and some, such as reduced fares, are already being realised. If we want to rid ourselves of the perception that the capital is stagnating we need to be bold and do things differently. We know we have a world class city, let's open our front door and get more people here to enjoy it.
Justin Lester is deputy mayor of Wellington