R/17/5/11122 - Southland District€¦ · Te Anau Airport Manapouri AMP 2018-2048 Page 1...

R/17/5/11122

Te Anau Airport Manapouri AMP 2018-2048 Page i R/17/5/11122

Quality Assurance Statement: Quality Assurance Statement

Southland District

Council

15 Forth Street

Invercargill 9840

Telephone 0800

732 732

Fax: 0800 732 329

Version 2 December 2017

Status Draft

Project Manager:

Prepared by: AMP

Author

Trudy Saunders, Contracts Administrator

Reviewed by: Evan Pearce, Airport Manager

Approved for issue

by:

Council (27 February 2018)

Te Anau Airport Manapouri AMP 2018-2048 Page ii R/17/5/11122

Contents

Executive Summary ....................................................................................................................... 1

1. Introduction ........................................................................................................................ 5 1.1 Purpose of this Plan ................................................................................................ 5

2. Activity Description ........................................................................................................... 5 2.1 What We Do ............................................................................................................ 5 2.2 Why We Do It .......................................................................................................... 6 2.3 Objectives of the Te Anau Manapouri Airport Activity ............................................ 6 2.4 Overview of Management ....................................................................................... 6

2.4.1 Service Delivery Review ............................................................................. 7 2.5 Plan Limitations ....................................................................................................... 7 2.6 Plan Framework ...................................................................................................... 7

3. Strategic Direction ............................................................................................................. 8 3.1 Community Outcomes ............................................................................................ 8 3.2 Strategic Priorities ................................................................................................. 10

4. Key Issues ........................................................................................................................ 12 4.1 Key issues for the next ten years .......................................................................... 12 4.2 Changes Made to the Activity ............................................................................... 13 4.3 Key Projects .......................................................................................................... 14

5. Our Levels of Service ...................................................................................................... 15 5.1 Customer Expectations ......................................................................................... 15 5.2 Planning Framework ............................................................................................. 15 5.3 Levels of Service, Performance Measures and Targets ...................................... 16 5.4 Plans Programmed to meet the Level of Service ................................................. 16

6. Managing Future Demand .............................................................................................. 17 6.1 Predicting Future Demand for the Activity ............................................................ 17

6.1.1 Demand Drivers and Forecasts ................................................................ 17 6.2 Implications of Growth/Demand ............................................................................ 18 6.3 Demand Management Strategies ......................................................................... 18

6.3.1 Asset Management Strategies to Manage Demand ................................ 18 6.4 Plans Programmed to Meet Growth/Demand Changes ....................................... 19 6.5 Sustainability ......................................................................................................... 19

7. District-wide Asset Management Strategies ................................................................ 20 7.1 Overview of the Te Anau Airport Manapouri Assets ............................................ 20

7.1.1 Asset Value and Depreciation .................................................................. 21 7.1.2 Asset Condition and Performance ........................................................... 22

7.2 Approach to Operations and Maintenance ........................................................... 25 7.2.1 Historical Trends ....................................................................................... 25 7.2.2 Operations and Maintenance Strategy ..................................................... 25 7.2.3 Operations and Maintenance Trends ....................................................... 25 7.2.4 Operations and Maintenance Forecasts .................................................. 26

7.3 Approach to Renewals .......................................................................................... 27 7.3.1 Renewal Strategy ..................................................................................... 27 7.3.2 Renewal Past Trends and Forecasts ....................................................... 27

7.4 Upgrading and Developing New Assets for Levels of Service and Demand ....... 28 7.4.1 Capital Investment Strategy – LOS and Demand .................................... 28 7.4.2 Future Improvement ................................................................................. 29

8. Financial Summary .......................................................................................................... 30 8.1 10 Year Financial Forecast ................................................................................... 30

8.1.1 Financial Summary ................................................................................... 30 8.1.2 Total Income ............................................................................................. 30

8.2 Financial Forecast Summary ................................................................................ 32 8.3 Summary of Key Financial Assumptions .............................................................. 33 8.4 Valuation Approach ............................................................................................... 33 8.5 Funding Principles................................................................................................. 33

Te Anau Airport Manapouri AMP 2018-2048 Page iii R/17/5/11122

9. Activity Specific Assumptions ....................................................................................... 35

10. Significant Effects, Risk Management & Quality Assurance...................................... 36 10.1 Significant Negative Effects .................................................................................. 36 10.2 Risk Management ................................................................................................. 36 10.3 Compliance and Quality Assurance ...................................................................... 37

11. Activity Management Plan Improvement ...................................................................... 38 11.1 Progress against Previous AM Improvement Programme ................................... 38 11.2 Assessing Current and Desired AM Practices ...................................................... 38

11.2.1 Understanding and Defining Requirements ............................................. 38 11.2.2 Developing Asset Lifecycle Strategies ..................................................... 40 11.2.3 Asset Management Enablers ................................................................... 40

11.3 AM Improvement Plan .......................................................................................... 41 11.4 Ongoing Monitoring and Review ........................................................................... 41

Te Anau Airport Manapouri AMP 2018-2048 Page 1 R/17/5/11122

Executive Summary

Complete this summary section after remainder of plan. Refer to plan sections where appropriate.

The Services Provided

Te Anau Airport Manapouri is located between Te Anau and Manapouri. The facility is designed and managed to attract and facilitate access by air to Fiordland, the Te Anau community, its businesses and the surrounding natural environment. The activity also contributes to safe places as the airport provides for air-based emergency access which can act as an alternative to road transport in an emergency. Historically the land has been used for airport or aviation activities and was previously owned by Mount Cook Airline and then Air New Zealand, before being purchased by the Southland District Council in 2002. The airport is managed as a Business Unit and run on commercial lines. The income received is used to offset current loans extended to the airport for development costs associated with a substantial upgrade of facilities that were completed in 2009, and operational costs associated with running the airport.

What We Aim to Achieve

Table 1 presents the framework for monitoring performance of the airport facilities:

Table 0-1: Te Anau Airport Manapouri Performance Management Framework


Managing Future Demand

There are a number of constraints on the potential activity and revenue at the airport:

The airport is classified as a regional airport and is an end of the line destination, not a transit stop or hub to other destinations. Its geographic location away from areas of greatest population in New Zealand limits the of operational cost attractiveness of direct flights from all but possibly Christchurch International Airport.

There is a small local market for airport based activities that provide limited income due to the size of operations that these companies can sustain.

Due to the nature of the lease arrangements with the section developer for the non-operational areas and associated hangar development, potential start-up businesses have no say on how the business model of the developer is managed therefore is totally reliant on the developers marketing and price structures to incentivise or deter new business to the airport. The only land available for the Council to attract new business is from the two private section allocations which are restricted to non-commercial buildings. The Airport Manager has no control over these business arrangements

The local towns Te Anau and Manapouri have a seasonal tourist trend which provides for approximately nine months of earning potential from inbound flights of a tourist nature.

For these reasons, this AM Plan and financial forecasts assume continuation of current revenue levels.

Lifecycle Asset Management

The variety of components making up the airport have varying lifecycles. The maintenance and renewal requirements of these will be addressed according to those lifecycles – number of years. This is considered to be a standard asset management approach.

Key Issues, Options and Implications

Key Issues Options Implications

Promotion of airport

- To the industry at large

- Training flight opportunity

- Diversify the building types to

allow for hanger

accommodation options.

- Work with local tourism

operators to promote airport

- Work with flight training

providers to enable training

school to be based at airport

through the development and

alliance with established

providers that specialise in

remote and mountain flying

training

- Communication plans drafted in

2017.

- As a fly in fly out destination for

people that want to take

advantage of the Te Anau area

as a family holiday destination.

Increased usage and revenue


Plan available to Council

Increased usage and revenue and

increase in investment in holiday

homes in area.

Availability to use airport for aircraft hangarage for corporate jets using other local airports i.e. Invercargill, Dunedin and Queenstown

Create Partnership with other airports for parking of planes for up to one month.


Increasing adventure tourism Creating business plan for ‘start-up’ hanger where new businesses can lease hanger or space until they are financially and operationally able to lease own hanger. Hanger would be

Business plan being drafted at ti me of writing AMP.


large enough for three airplanes. Airport to own hanger and lease out.

Cost approx. $100,000 for hanger.

Condition of apron Do assessment of runway in 2019/20. Reseal to be scheduled after assessment.

This could bring forward full reseal.

Te Anau Wastewater treatment plant located beside airport. This could deter potential users of airport.

Loss of opportunity to increase users and revenue.

Table 0-3: Key Issues, Options and Implications

Financial Summary

Potentially the airport has reached its maximum operational size in both physical characteristics and scope of environmental factors such as day/night operations and poor weather operations without significant expenditure and regular use justification. The future costs associated with running this airport is therefore limited to the maintenance upkeep of the present assets that the airport currently has, other than the runway and apron seal and remark in 2021-2022 the forecast includes reliability/ renewal of the ground equipment associated with the scope of activities the airport offers. The 10 year financial forecasts are presented below and the basis for these projections is detailed in Section 8. The airport has additional operational capability and from a financial perspective, the expenditure is reflective of the level of operations at the airport, this includes providing for some additional certification and maintenance in the foreseeable future.

Figure 0-1: Te Anau Airport Financial Summary

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Renewals Acquisition-Level of Service Acquisition-Demand

Vested Assets Maintenance Costs Operating Costs

Income


In 2007-2008 $4.3 million capital work was undertaken which was depreciated at 10% per year. Depreciation drops significantly in 2018-2019 as there are no significant future capital projects planned.

Figure 0-2: Te Anau Airports CAPEX Summary

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Renewals Level of Service Demand Vested Assets Depreciation


1. Introduction

1.1 Purpose of this Plan

The purpose of this plan is to document the Southland District Council’s (SDC or the Council) asset management practices and achieve an optimised life-cycle strategy for Te Anau Airport Manapouri (the airport) infrastructure for the next 10 years. This is a long term planning document. It represents the aspirations of SDC and will be reviewed every three years. The budgets and timeframes provided in this plan will be recommended to the Council for adoption through the Long Term Council Plan (LTP) and Annual Plan process.

2. Activity Description

2.1 What We Do

The Te Anau Airport Manapouri provide facilities for flights services in and out of the Te Anau basin. The airport has a sealed and unsealed runway, terminal building and other facilities for visitors and users including hangar spaces. The airport is largely servicing local fixed wing and helicopter scenic flights, charter flights and high end commercial flights, utilizing large passenger aircraft related to the nearby Fiordland National Park and surrounding tourist communities, as well as an events venue with events hosted at the terminal building.

Currently Fiordland Aero Maintenance and Te Anau Helicopter Services have leased hangers from MGJV. Flights to and from the Chatham Islands are provided by Air Chatham a few times per year. Alliance Airlines of Australia operate a closed charter service for Tauck Tours of America up to three times per week during the summer season. Most large aircraft movements are serviced by our Ground Handling staff who set the approach light systems, bird scare, baggage handling and management of the Apron activities. The airport also offers a certified refueling service.

The airport currently has the following assets (details are included in Section 7):

Runway, runway strip and apron.

Buildings and other facilities

Access, fencing and security.

Ground Handling Services


2.2 Why We Do It

Te Anau Airport Manapouri is a facility designed and managed to attract and facilitate access by “air” to the Te Anau and Manapouri area communities, its businesses and the natural environment that encompasses this unique part of New Zealand through safe and efficient businesses practice.

Activity Aim: Provide a safe and reliable airport in the Te Anau Basin.

2.3 Objectives of the Te Anau Manapouri Airport Activity

The airport and supporting aviation activities associated with the airport in the Southland District (SDC) is focused on the achievement of the following objectives:

Provision of a safe and compliant operational environment, including runways, taxiways and apron facilities for a wide variety of fixed wing (jet and prop), rotary and skydive activities.

Provision of a welcoming terminal building of a standard comparable to the most affluent of passengers.

Provision of an attractive Functions Centre that is well utilised for weddings, corporate functions and family social occasions.

Provision of leased land on the non-operational areas of the aerodrome which attracts ancillary businesses to support the established tenants of the aerodrome and visiting aircraft, along with non-commercial activities such as private aircraft owners and aircraft restorers.

To provide air based emergency access which can act as an alternative to road transport when required.

2.4 Overview of Management

The assets covered in this plan are the responsibility of the Council’s Services and Assets Group under the strategic direction of Council, the Executive Leadership Team and Community Boards. Asset management responsibilities are covered in detail in Council’s Asset Management Policy. Service delivery is provided as follows:

Operation and maintenance (O&M) is delivered by an Airport Manager contracted by Council.

Resourcing of technical expertise for capital works and design is from internal engineering sources provided by the SDC and outsourced where necessary. The overall responsibility for the management of these projects lies with the Airport Manager.

Additional information on how the activity is managed is detailed in section 7.


2.4.1 Service Delivery Review

Section 17A of the Local Government Act 2002 requires all local authorities to review the cost-effectiveness of its current arrangements for delivering good quality local infrastructure, local public services and performance of regulatory functions at least every six years. There has been no service delivery review for the Te Anau Airport Manapouri and none are scheduled as of June 2017. A 17A review may be implemented during the lifetime of this Asset Management Plan.

2.5 Plan Limitations

The airport is a relatively new facility and therefore there is limited historic data on which to base long term forecasts. An assessment on runway paving has been completed by a variety of contracting companies such as BECA. No condition reports have been completed. Growth and decline of aviation activity is strongly influenced by external economic local, national and global activity. Factors that limit the accuracy of the forecasts are the dependency on these external factors of economic growth and tourism trends.

2.6 Plan Framework

The AM Plan framework is illustrated in Figure 2-1 Corporate information common to all AM Plans has been included in a separate document, the AMP Part A (r/16/8/12686). District-wide information and strategies are documented in the main body of this plan. Information on locally funded activities and services are included in the appendices to this plan.

Figure 2-1: Asset Management Plan Framework


3. Strategic Direction

3.1 Community Outcomes

The Council has adopted a Strategic Framework that identifies where the Council wants to be in the future (vision) and the outcomes it aims to achieve to meet the current and future needs of communities for good-quality local infrastructure, local public services, and performance of regulatory functions (community outcomes). The framework also outlines how it will achieve these (mission and approach) along with the key challenge it faces in doing so and its resulting strategic priorities. The framework guides staff and informs future planning and policy direction and forms the basis for the performance framework. Additional information about the Council’s strategic framework is included in AMP Part A (r/16/8/12686). Table 3-1 outlines how the Te Anau Manapouri Airport activity contributes to the Council’s community outcomes. The full levels of service and performance management framework is presented in section 5.3.

Council Outcomes Activity Contribution Level of Service

Proud, connected communities

that have an attractive and

affordable lifestyle

This means Southland District is a

place where people have

everything they need to live, work,

play and visit; where they are

connected to each other, the

environment and the world outside

Southland; and where they can

enjoy a safe and fulfilling life in our

unique natural environment.

The airport provides an alternative mode

of transport to the Te Anau basin which is

more efficient or desirable than by road

due to its geographically isolated location.

It also provides air-based emergency

access. It supports the local economy

through local tourism operators giving

access to the surrounding natural

environment, and aviation support

businesses. The airport provides a

welcoming experience to inbound flights.

The airport is managed in compliance with

Civil Aviation safety protocols.

The terminal building is available for

functions for the local community and

visitors.

Reliability and Safety

Provide accessible, reliable

and safe air facilities and

operations for the Te Anau

Basin.

Create a welcoming

experience with high levels of

customer satisfaction.

Resilient communities that leave

a legacy for tomorrow

This means Southland District is

made up of strong communities

that take a sustainable approach

by considering the impact on the

environment and the social,

cultural and economic wellbeing of

our communities now and in the

future.

The terminal building design reduces the

visual impact to the natural environment.

Flight paths are designed to have the least

impact on the natural quiet of the

surroundings.

Providing space for local business to

create opportunities for new or expanding

operations such as adventure tourism.





Basin.





Basin.

Table 3-1: Activity Contribution to Council Outcomes


3.2 Strategic Priorities

The Council has identified four priority areas in response to the key strategic challenges facing the Council and the community to achieve the Vision and Community Outcomes (refer Strategic Framework in AMP Part A r/16/8/12686 for more details). The contribution that the activity makes to these Strategic Priorities are shown in Table 3-2.

The Strategic Priorities are set out in AMP Part A r/16/8/12686. Please note that these have been reviewed following the Council’s Strategy Workshop in February and are yet to be confirmed by Council. Describe which Strategic Priorities that the activity contributes to and how and what will be done over the period of the plan. See the Strategy and Policy team if you require assistance.

Strategic Priorities 1. Improve how we work 2. Provide appropriate

infrastructure/services

3. Make informed decisions 4. More people

Contribution Area

What will be done in the

long-term (next 10 years) Ensuring CAA compliance Provide more accommodation for

businesses and visitors to increase

revenue as a result of the Business

Plan.

By keeping up to date with current

industry demands on aviation

activity and tourism activity trends,

this creates changes in demand for

airspace and ground space

allocation.

For example there is large growth

in adventure aviation, such as the

establishment of skydiving

activities in the area.

Aligning with the CAA airport

guidelines and with peer support

from the Invercargill Airport

providing industry best practice.

Helping to build strong

communities by providing a safe

and accessible alternative to

travelling by road. Giving an option

of commuting by air.

What will be done in the

short-term (next 3 years)

Investigating further business

opportunities to increase revenue

and therefore reduce cost to local

ratepayers.

Partnerships with regional airports

to utilise the airport for parking of

corporate / luxury jets to increase

revenue through landing fees.

Investigate proposal to install

helicopter pads.

Provide for a transitional hangar for

new businesses to start up,

establish and grow to the extent

they require a move to a more

permanent facility on other prime

industrial sections.

Draft business plan for creation of

Start-up hanger to assist new or

existing businesses to expand

operations in the local area.

Helping to build strong

communities by providing a safe

and accessible alternative to

travelling by road. Giving an option

of commuting by air.


Key Actions and Projects Draft Business Case for further

business opportunities.

Increase promotion of airport to

the tourism and aviation

industries.

Improve signage to airport.

Full condition assessment of Apron

Runway condition assessment and

resealing

Provide for a transitional hangar for

new businesses to start their

business, establish and grow to the

extent require to move to a more

permanent facilities on other prime

industrial sections.

Review current lease with MGJV. Provide a more attractive and

simple transition to business

support by the airport

infrastructure/

Related strategies / plans /

policies

Financial Strategy Infrastructure Strategy Business strategy Community Strategy

Table 3-2: Activity Contribution to Strategic Priorities


4. Key Issues

4.1 Key issues for the next ten years

The most important issues relating to the Te Anau Manapouri Airport activity for the next ten years are shown in Table 4-1.

Activity Te Anau Manapouri Airport

Issue Promotion of Airport

Description Promotion to the industry at large. Training flight opportunity through a provider for training on GPS approach and mountainous terrain.

Implications Increased usage and revenue

Options 1. Work with local tourism operators to promote airport 2. Work with flight training providers to enable training school to

be based at airport.

Assumptions Both options should be investigated in a formal manner, for the greater community the tourism option is more relevant although from an airport perspective the destination “Fiordland” not the Airport is what the tourist is interested in. It is more the capability of the Airport for the Airline Operator that we are promoting from a local level. Our website provides for this already with a focused pilot briefing page in place.

Strategic linkage http://www.teanauairport.co.nz/

Consult in LTP No – consultation on a more local operational level.


Issue Utilising airport for plan accommodation

Description Availability to use the airport for plane accommodation for corporate jets using other local airports i.e. Invercargill, Dunedin and Queenstown.

Implications Increased usage and revenue

Options Create partnership with other airports for parking of planes for up to one month

Assumptions Currently Queenstown airport uses Wanaka as they have a financial and vested interest in this airport. Our closest Airport that would work in this respect would be Invercargill. Initial discussions have begun with both Invercargill and Venture Southland. Further time needs to be spent with both groups to progress the options. There is a link between the two destinations completing the golden triangle Invercargill – Te Anau – Milford – Invercargill. Focus will be on tourist orientated traffic with Air NZ flying tourists to Invercargill then they get air transport to Stewart Island, Te anau and Milford.

Strategic linkage Promotion of the three destinations as a package. We need to continue talks with the local operators to see if a service can be developed providing that link by air.

Consult in LTP Yes


Issue Increasing adventure tourism

Description Creation of a business plan for ‘start-up’ hangers.

Implications Cost of setting up new hanger. Increased usage and revenue and increased profile of the airport.

Options New businesses can lease hanger or space until they are financially and operationally able to lease own hanger. Hanger would be large enough for three airplanes. Airport to own hanger and lease out. Cost (TBC) approx. $100,000 for hanger.

Assumptions SDC need to commit to foster start-up businesses by providing a mechanism for these businesses to start in a way that the outlay isn’t

http://www.teanauairport.co.nz/


large but caters for the size of aircraft and additional space that they require. Once their businesses is up and running this will then foster further commitment to the airport by that business moving into and or building their own facilities and allowing additional start-up to move in and the cycle starts again. The airport is out on a limb location wise therefore we need to be able to provide additional support to attract these businesses.

Strategic linkage Increased utilisation and Te Anau/Manapouri is a destination that has a sound aviation activity base with a variety of activities on offer not just a helicopter flight around the fiords.

Consult in LTP Yes


Issue Condition of Apron

Description Apron requires a condition assessment in 2018/19

Implications Reseal is currently planned for 2020/21. If the assessment states the condition has deteriorated this may require the reseal to be bought forward.

Options 1. Wait for results of assessment before confirming which financial year this will be allocated to.

Assumptions Assuming the condition report is status quo the reseal will go ahead as planned in 2020/21.

Strategic linkage Infrastructure Strategy

Consult in LTP Yes


Issue Opportunities for the building of private hangers and residences on site.

Description Business case required to investigate potential for private hanger which may include short term residences to be built on site with direct access to the runway.

Implications Increased usage and revenue and

Options 1. Create opportunities for private individuals to construct suitable hangers and / or short term residences (i.e. holiday homes).

Assumptions - Business case would be provided for Council consideration. - Due to the remote location for owners for Christchurch, Dunedin

and further afield require live-in accommodation. Possibly open this up to a Hangar Accommodation business opportunity

- Ensure residential opportunities include a large enough accommodation footprint to include pleasure boat accommodation etc

Strategic linkage Link to a community focus on Residential Aviation Community, opportunities for Airline operations to base crew at the airport.

Consult in LTP Yes

Table 4-1: Key Issues for the Activity

4.2 Changes Made to the Activity

Table 4-2 summaries the key changes for the management of the Te Anau Manapouri Airport activity since the 2015 Activity Management Plan.

Key Change Reason for Change

Airport Management of all land usage

and contracts with close liaison with

Council and Te Anau Community Board.

Airport has direct contact with end users.

Table 4-2: Key Changes to the Activity


4.3 Key Projects

Table 4-3 details the key projects programmed for years 2018 to 2028.

Table 4-3: Key Projects

Project Name Description Type* Year $Amount Funding Source

Airport Helipads 2 helipads made from sleepers and large gravel

alongside the fuel for helicopters to land off the

runway apron

LOS 18/19 14,000 Rates

Upgrade to security system To upgrade the current security system including

cameras and hard drive to bring it up to current

standards

LOS 18/19 8,000 Rates

Moss killing and reoiling of building As per 2018-28 AMP MAINT

PLAN

18/19 16,000 Rates

Complete reseal of runway and apron

including remarking

As per the AMP 2018-28, combining of two

projects identified

REN 21/22 325,576 Reserves

GPs Upgrade GPs Upgrade LOS 22/23 10,920 Rates

Re-carpeting Regal Floors Quote

To lift existing carpet tiles, Prepare floors, Supply

and lay 100% Solution Dyed nylon carpet tiles,

Finish off with alloy bars

$15,600.00 PLUS GST

REN 22/23 16,380 Rates

Upgrade to security system To upgrade the current security system including

cameras and hard drive to bring it up to current

standards

LOS 23/24 8,946 Rates


PLAN

23/24 16,773 Rates

Airport Heat Pump Replacement Replace 3 x heatpumps REN 23/24 11,182 Rates

Painting of internal walls in terminal To repaint internal walls due to end of life O&M 25/26 35,279 Reserves


PLAN

28/29 19,826 Rates

Te Anau Airport


5. Our Levels of Service

This section outlines why the Council is involved in this activity and the key drivers for levels of service, including customer expectations, legislative/regulatory requirements and Council outcomes. Section 5.3 details what level of service will be provided and the performance measures and targets which will be used to monitor performance.

5.1 Customer Expectations

In providing services it is important to understand what the customer using the service expects and if those expectations may change. The table below details the key customer groups, their expectations and any issues that this raises for the activity.

Customer

stakeholder group

How we understand

their requirements

Specific Interests Expectations and key

issues

SDC Monthly reporting on monthly aircraft usage. LTP

Maintenance Marketing

Increased utilisation. Varied customer base Increase in tourist orientated traffic.

Function Centre Hirers

Hirer documentation Customer Feedback

Maintenance Marketing

Attractive clean tidy venue. Safety. Competitive Pricing.

Fuel Suppliers Monthly Requirements Annual Forecasts

Suppliers Customers Attraction to Airport with Services and Supply

Safety and compliance. Maintain fuel handlers qualification.

Hangar Tenants Six monthly meetings. Cost Value Basis Well maintained airport environment for attraction of clients

Local Aviation Community

Annual Meetings In house rules document Airport memos

Activities on airport Airport Information

Safety Procedures and information

Non Local Aviation Community

Customer Feedback Via Website Direct Communication

Availability of Service Internet Information Weather Reporting Terminal Availability

Civil Aviation Authority

Reference to CAA Rules and Advisory Circulars Direct Contact Compliance Audit

Safety Management Minimising incidents Maximise compliance and introduction of Safety Management Systems. Update of information

Table 5-1: Customer Expectations

In providing services it is important to understand what the customer using the service expects and if those expectations may change. The table below details the key customer groups, their expectations and any issues that this raises for the activity.

5.2 Planning Framework

Legislation, regulation and Council’s existing strategies and policies mandate or influence some of the levels of service and performance targets we set, as illustrated in the table below for the Te Anau Manapouri Airport activity. A full description of the Council policy and planning framework impacting AM Plans is included in the LTP and AMP Part A (r/16/8/12686).

Legislation / Regulation /

Planning Documents

How it affects levels of service and performance standards

Outline any changes (implemented or pending) which is impacting

the activity and describe how

Building Act 2004 Sets building code standards to provide a safe environment for users.

Certain buildings must have an annual Warrant of Fitness.

RMA 1991 Consents and plans issued through the RMA define minimum standards

for effluent overflows and discharges from the wastewater network.


Regional Plan Sets policies rules and regulations for land use and resource use in the

region. Tightening environmental standards may require treatment of

stormwater discharges.

Civil Aviation Act 1990 Sets out the legislative frame work for the Part 139 Certified Aerodrome

Rule and associated Advisory Circulars.

Changes: Nil

Civil Aviation Rules Part 139 Sets out the requirements for the set and running of a certified

aerodrome in New Zealand.

Changes: Introduction of SMS by 2021.

Health and Safety at Work Act

2015

Sets policies and rules to protect employees and contractors whilst at

work in a New Zealand workplace

Changes: forms part of SMS plan.

Infrastructure Strategy «Insert detail»

Changes: «Insert detail»

Financial Strategy «Insert detail»

Changes: «Insert detail»

Southland Water and Land Plan Monitoring Water quality

Changes: new plan and regulations.

Table 5-2: Te Anau Manapouri Airport Planning Framework

5.3 Levels of Service, Performance Measures and Targets

Levels of service (LOS), performance measures and targets form the performance framework for the activity detailing what the Council will provide, and to what level or standard:

• LOS are the outputs that are expected to be generated by the activity. They demonstrate the value being provided to the community or reflect how the public use or experience the service. A key objective of activity planning is to match the level of service provided with agreed expectations of customers and their willingness to pay for that level of service.

• Performance measures are quantifiable means for determining whether a LOS has been delivered and are generally broken into customer measures (which focus on how the public uses or experiences the service) or technical measures (which tend to be used internally to track performance or measure what the organisation does).

• Performance targets are the desired levels of performance against the performance measures.

The levels of service for the airport is Facilities are fit purpose, in appropriate locations and managed cost effectively. Following the benefits mapping process to show the link between the outcomes and the activity and levels of service, the number of performance measures has been reduced. As a result the measures relating to the airport activity are being monitored at an operational level.

5.4 Plans Programmed to meet the Level of Service

The list below details any projects, initiatives, programmes or expenditure that the Council is planning to undertake to ensure that the level of service is achieved and/or to address any gaps between the targets and current performance. Where there are capital works projects related to improving levels of service (LoS) or maintaining levels of service (Renewal – R), these are identified in section 7.

More direct airport management control of land usage, to be able to develop current section to operational states, amend current land use to include accommodation /hangar options.

Develop and build on some of the spare apron land to provide transition hangar for new start-up companies.


6. Managing Future Demand

This section describes how the demand for the Te Anau Airport Manapouri is likely to change over the period of the plan, the impact any changes are likely to have and whether the Council is planning to make any changes to the activity as a result.

6.1 Predicting Future Demand for the Activity

6.1.1 Demand Drivers and Forecasts

The factors influencing demand for the service are summarised below. The Council has prepared corporate wide assumptions/projections for growth drivers (population, land use, dwellings, tourism) which have been used as the basis for assessing future demand for the service. These projections are detailed in the Assumptions section of the LTP and AMP Part A (r/16/8/12686). Demand for the Te Anau Airport Manapouri service can be measured in terms of the number of landings that the airport receives over a period of one year. The factors influencing demand for service are summarised in the table below.

Demand Driver Impact on Future Demand

Population With an increase in population a percentage growth for recreational flying will

increase providing increases in landing charges and promotion of aviation

related activities. The airport structure including land available can cater from

the projection of 10% growth within the next 10 years. With a declining

population the reverse will be seen making it difficult to justify staffing levels

and further refurbishment of facilities. The population age demographic could

have an independent effect on growth if a greater percentage of the

population has discretionary wealth that they choose to spend on aviation

interests be it recreational or business.

Tourism With the trend for changes in tourism visitor’s nationality type towards

Chinese and Malaysian with the introduction Asian based airlines direct into

Christchurch, the airport is now capable of marketing to all New Zealand

Charter Aviation Operators. The downstream effect will be increase in

landing fees and income for associated tourist orientated businesses in the

region. Other niche markets such as corporate jets and heritage aircraft are

also sectors with potential for growth.

Dwelling Due to the nature of both Te Anau and Manapouri as residential and holiday

accommodation focus. With an increase in new houses, the downstream

effect could provide increased activities at the airport for casual residents to

access the area by air and permanent residents providing further justification

for scheduled air services into the region.

Table 6-1: Demand Drivers

The information in the LTP and AMP Part A r/16/8/12686 suggests that:

Population for Te Anau is predicted to grow from 2938 in 2018 to around 3383 in 2028. Manapouri is predicted to grow from 332 in 2018 to around 354 in 2028.

The number of occupied dwellings in Te Anau and Manapouri is predicted to increase proportionally to the increase in population.

Tourism growth is expected to average 5.4% per year and the number of nights stayed in the Fiordland to increase (report New Zealand Tourism Forecasts 2016-2022).

The large aircraft movements have shown slow by steady growth of approximately 10% over the last six years with a revenue growth of 20%. Small aircraft movements have declined by 6&. The global financial crisis and the internal financial situation meant growth of the airport activity has been minimal over the last three years. In that period the focus has been on getting the airport setup with an efficient and safe operational focus. The GPS approach is a key part of this focus.


For the purposes of the budget projections, demand in terms of landings and fees earned is assumed to hold constant over the 10 year period (apart from inflationary adjustments).

6.2 Implications of Growth/Demand

The airport underwent an extensive upgrade to the runway operating surfaces to cater for large aircraft. Further equipment has been installed to comply with additional Civil Aviation and Operator requirements. A GPS based approach system has been developed and implemented, an upgrade to the system has been completed and will go live in February 2018. This has the advantage of providing state of the art information to pilots. It also means some of the electronic equipment previously operated and maintained by the airport is now no longer needed. AirBP have installed a new refueling terminal. This provides Av Gas and JetA1 fuel via a modern card based dispensing and payment system. This is effectively a 24 hour self-service system. There are no further operational requirements for future growth in aircraft type that is reasonably expected for the region and type of opportunities available to the airport. There is limited apron and terminal check-in facilities but for the envisaged growth in the next 10 years this is no concern for capacity. As this is an asset orientated business with contract staff, future decline in business will have little effect of asset provision. Income levels and demand will affect the hours of operation.

6.3 Demand Management Strategies

The airport relates to activities associated with business and seasonal trends in the Te Anau Manapouri region which is primarily tourist driven and is partially driven by the marketing strategies of these businesses. With these drivers the airport needs to remain a viable access point for customers to promote access to the region by air. The business is seasonally affected and must ensure that all efforts are made to cater for high demand periods and provides the level of service that the airport is capable of supporting.

6.3.1 Asset Management Strategies to Manage Demand

The demand for service is driven by the regional capability to attract large numbers of tourist orientated traffic. The airport and is capability is limited to the size and frequency of aircraft movement by accessible operational area. Unlike international airports, Te Anau Airport can only attract a limited size of aircraft from a regional perspective thus the level of service offered in comparison to services of larger international airports is capped. The seasonal nature of activities within the region means that the airport personnel structures have a high and low periods and must maintain that flexibility to warrant the employment or contracting of suitably qualified persons in time of need. Also, due to a high percentage of helicopter aviation activity in the region and the nature of that activity, helicopter bases do not require large areas of land to operate and therefore have the option to locate away from the airport facilities this also limits the airport’s potential to receive landing fees. Furthermore, Te Anau Airport Manapouri has three large airports within 20 minutes flight time of Te Anau Airport two serving international traffic and all three having regular domestic services. With this in consideration the scope to expand in the current and perceived future environment suggests little further growth in size and capability. Frequency of operations at the present level of service can increase without further expenditure required by the airport.


6.4 Plans Programmed to Meet Growth/Demand Changes

The list below summarises projects, initiatives, programmes or expenditure that the Council is planning to undertake to meet changes in demand (D). Where there are capital works projects related to demand (D), these are identified in section 7.

A business case will be prepared for the installation of two new heli-pads and a start-up hanger and will be completed by July 2018.

6.5 Sustainability

The Local Government Act 2002 requires local authorities to take a sustainable development approach while conducting its business, taking into account the current and future needs of communities for good-quality local infrastructure, and the efficient and effective delivery of services. At the Te Anau Manapouri Airport activity level, a sustainable development approach is demonstrated by the following:

• Ensuring maintenance schedule is adhered to

• Customer focused management of facilities.

• Condition assessments completed in a timely manner to ensure the maximum life expectancy of the assets.


7. District-wide Asset Management Strategies

Lifecycle asset management means considering all asset management options and strategies to deliver the agreed level of service and to inform decision-making for asset renewal, replacement, upgrade and disposal. Effective lifecycle planning is about making the right investment at the right time to ensure that the asset delivers the desired level of service over its full-expected life, at the minimum total cost. This section explains the approach for:

Providing new or upgraded assets to improve service levels, providing for growth and demand

Operating and maintaining assets

Renewing or replacing assets

Disposing of assets at the end of their useful life. All asset data has been extracted/reported as at September 2017..

7.1 Overview of the Te Anau Airport Manapouri Assets

The Southland District Council owns a parcel of land that incorporates approximately 74 hectares of rural land approximately 20 km to the south of the township of Te Anau and 7 km to the north of the township of Manapouri.

Description Area

Section 7 Block IV Manapouri SD C/T 37.1610 ha

Lot 2 DP 346549 2.8469 ha

Lot 2 DP 346549 34.7226 ha

Total 74.7310 ha

Table 7-1: Airport Land

The land is divided into operational and non-operational areas. The operational areas are under the direct control of the Airport Manager and all activity is authorised by the Airport Manager under authority of the Southland District Council. The non-operational areas are further broken down into ancillary functional areas such as vehicle parking and access roads and parcels of land that are available for lease to build aviation related buildings on from which the Southland District Council receives market rent from. Of the land available for rent, two of the nine areas are under the authority of the Airport Manager and are termed non-serviced and not designed for commercial use. The remaining areas (Sections 3-9) have been leased out to a private development company with limited control provided to the Council to regulate commercial activity which in turn limits growth potential with Council interaction. The Te Anau Airport Manapouri is owned by the Southland District Council and contracts external personnel to manage the day to day running and compliance requirements of the airport. The internal contracted management structure reports to a CEO who is employed by the Southland District Council and overseen by the Te Anau Community Board who has decision capabilities for the future direction and maintenance of the asset on behalf of the Te Anau community. The airport is managed as a business unit and run on a commercial basis. Operational surpluses are returned in the form of rating liabilities to the affected ratepayers by either increasing of reducing the rates associated with the financial load the airport has on those ratepayers. The airport assets are in the form of that required by compliance to the Civil Aviation Authorities Part 139 requirements, the scope of perceived business that the physical qualities of the airport has and the land available to the airport business for support, business ,private facilities and expansion. These include:

Runway, runway strip and apron:


Main runway leading from the apron consisting of type 2 slurry surfacing over a previous construction of a grade 4 chip seal surface with a clip-on extension widening the effective width to 30 metres of a rough chip seal surface.

An extension of asphaltic concrete extending the total operational length to 1,594 metres.

An asphaltic concrete apron leading to the older seal.

A grass taxiway leading from the terminal to the grass cross wind runway.

A hard packed grass runway 969 metres.

Buildings and other facilities:

Terminal Building.

An automatic weather station belonging to the New Zealand Meteorological Services.

A small facility shed.

Boundary fencing:

The runways have stock proof fencing around its perimeter.

Passenger security fencing.

Access and security: fencing and locked gates to deter people, CCTV in operation.

Access from SH 95 via a chip seal access road.

The apron has a standard 1.2 metre waist height fencing and lockable gate for tarmac access.

Gate access on SH 95 is lockable.

Security Lighting located on the apron.

Services:

Tank water supply with automatic and manual refilling processes.

A telephone line connected to the terminal.

Toilet facilities. Sewage is disposed via a wastewater treatment system and on-site dispersal area.

Two below above ground refuelling storage facilities catering for Jet A1 and Avgas (AirBP)

Various soak pits are constructed around and adjacent to the airside pavements.

Road and car parking assets.

Lease land areas for development of commercial and private hangar facilities.

Portable ground power unit for external power supplies to aircraft on the ground.

Approach light system for visual approach guidance to the main sealed runway.

4x4 bike and ATV trailer for ancillary operations.

Aircraft baggage trolleys. Maintenance and renewal of equipment and assets are not subjected to high wear and tear rates but due to the significance to safety are more subject to maintenance than replacement.

7.1.1 Asset Value and Depreciation

The airport assets are valued as follows:

Asset Type Quantity Value

Runway Seal 47,820 m2 $4,954,258

Grass Runway and Strip 98,000 m2 $169,546

Apron 13,770 m2

Roading and Footpaths 8,900 m2

Fencing 1 $4,786

Petrol Generator 2 all $5,740

AT 300 Motorbike 1 $8,351

Terminal Building $1,839,572

aPAPI Lighting 2 $6,386

GPU (retired) 1 $6,365

Terminal Audio 1 $6,590


ATV Trailer 1 $1,000

Light Screen Protection 3 $2,448

Table 7-2: Asset Value, Airports

7.1.2 Asset Condition and Performance

The airport has undergone a major investment in rebuilding, replacement and asset purchases which places most of the assets associated with the airport in the new or near new category. As such the assets are at their beginning of their economic life and under builders or manufactures warranties. Using the risk of failure mitigation process, the airport has extensive monitoring processes in place to review the condition and potential failure of assets before they happen. Each asset is inspected monthly, a full condition assessment is carried out prior to each summer season. Overall, the condition of most of the assets at the airport are of a new or near new condition with the sealed runway being developed over an existing shorter original seal previously owned by Air New Zealand. As part of the extension programme the old seal was added to in length and resurfaced with a micro surfacing overlay. The building is relatively new with an average age of approximately eight years. The utilisation rate at the moment is low with little wear and tear. The ground equipment is regarded as in good second hand condition apart from the fixed visual approach lighting system and ATV trailer and associated portable power generators which were new on purchase.


Asset Installed (date)

Standards Condition Performance Assumptions Comments Capital Renewal or Maintenance Repair

Sealed Runway 01/01/08 CAA Part 139 Good A Little change due to scope of activity New Light Traffic Use Maintenance Repair

Grass Runway 01/01/08 CAA Part 139 Excellent A Little change due to scope of activity New Light Traffic Use Maintenance Repair

Taxiway and Runway Strip 01/01/08 CAA Part 139 Excellent A Little change due to scope of activity New Light Traffic Use Maintenance Repair

Sealed Apron 01/01/08 CAA Part 139 Excellent A Little change due to scope of activity New Light Traffic Use Maintenance Repair

Roading 01/05/10 Good A Possible change with increase in business development

New Light Traffic Use Maintenance Repair

Terminal Building 01/12/07 2011 building surveys and database

Excellent A Possible change with increase in business development

New Maintenance Repair

Furnishings 01/12/07 Excellent A Possible change with increase in business development

Furnishings and Furniture still in great condition.

Capital Renewal

Catering Equipment 01/12/07 Excellent A Increased usage through functions

New subject to catering for function use only

Maintenance Repair

aPAPI Lighting 10/02/11 CAA Part 139 Excellent A Little change due to scope of activity

New as required. Little use checked and cleaned regularly

Maintenance Repair

Fencing 01/12/07 CAA Part 139 Good B Shared responsibility with farm land owners

Mix of old and new. North side of runway has had part of fence renewed.

Maintenance Repair

Suzuki 300AT Motorcycle 01/01/09 Good B Little change due to scope of activity

Old little use. Checked and maintained regularly.

Maintenance repair

ATV Trailer 31/03/11 Excellent A Little change due to scope of activity

Relatively new has 2 x generators set up on for aPAPI lighting

Maintenance repair

Baggage Trolleys 01/01/08 Good B

Little change due to scope of activity

Deck on one trolley replaced Winter 2015, repainted all trolleys Winter 2015

Maintenance repair

Water treatment plant 01/12/07 Good B Maintenance repair

Wastewater treatment plant

01/12/07 Good B

New pump installed Oct/ Nov 2014

Maintenance repair


Asset Installed (date)

Standards Condition Performance Assumptions Comments Capital Renewal or Maintenance Repair

2 x Cummins P5000e Generators

Same as lights-

10/02/2011

Excellent Little change due to scope of activity Set up on ATV trailer and used for aPAPI lights. Little use and checked annually

Maintenance Repair

MTD Yard Man Ride on Mower (2nd Hand, unknown age) 18HP 42” cut

2013 Good Regular use Maintenance Repair

Cobra Lawn Mower (unknown age)

2011 Good Used for back up for ride on

Maintenance Repair

Airstep – Big Green Good Used occasionally Maintenance Repair

Airstep – Small White Poor Little change due to scope of activity Not used/ Unusable issue with steps

Wheel Chair and Aisle Chair

Good Little change due to scope of activity Little use Maintenance Repair

Garage 6m x 9m 2013 Excellent Regular use for Ride on mower, aPAPI lighting generators, storage and workshop

Maintenance Repair

Table 7-3: Asset Condition and Performance


7.2 Approach to Operations and Maintenance

7.2.1 Historical Trends

The purpose of this section is to outline the broad O&M philosophies for the assets, understand any underlying issues and trends, and set the basis for the O&M financial forecasts. Aviation activities within the Te Anau Ward are distributed between dedicated Council owned land assets such as airports and air strips and privately owned aircraft businesses using private land assigned to their specific activity. Prior to 2006 the assets now owned by the Council were also privately owned. When these assets came under the Council ownership the major activity that had previously occurred had closed down or stopped operating into the region, for example Mount Cook Airlines regular charter service from Rotorua and Mount Cook. During 2007/2008 the decision to upgrade the now Council-owned airport was made and resulted in the spike of expenditures. These values are forecast to remain stable with a slight increase due to inflationary pressure due to the scope of activity reaching its potential for the next 10 years.

7.2.2 Operations and Maintenance Strategy

Reactive maintenance: Reactive maintenance costs are driven by environment impacts such as unusually heavy precipitation/snow causing unanticipated erosion issues that are difficult to plan for. In addition to environmental effects, seismic activity cause unplanned maintenance activity associated with the landing surfaces that are subject to certain regulatory standards. Reactive maintenance decisions are made by the Airport Manager in consultation with the Community Engineer. Maintenance requirements are prioritised by operational pressures and regulatory compliance. Planned Maintenance: A schedule of annual inspections and planned maintenance has been developed and will be produced in consultation with the Community Engineers maintenance strategy. Repairs and maintenance are planned with reference to Appendix 1 “Maintenance Schedule Asset Management Plan Volume 1 Pavements and Landscaping” provided by Projenz Limited.

7.2.3 Operations and Maintenance Trends

There has been a slight growth in large aircraft movements by not enough to effect the maintenance management and planning.


Figure 7-1: Te Anau Manapouri Airport Opex Trends

7.2.4 Operations and Maintenance Forecasts

Most of the operating costs are assumed to hold constant over the 10 year period. Maintenance fluctuates to allow for expected refurbishments as detailed further below. Road works and building maintenance can be consolidated into the annual road works and building maintenance planning projects. This would be done by associating with other similar works in the area under asset ownership of the Council and would avoid isolation of similar works whilst the contracted expertise is in the area. Areas of consolidation would include the following:

Entrance roads.

Non-operational pavements.

Traffic markings including runway and apron markings.

Weed spraying.

External spider proofing.

Building staining. The assets were assessed in November 2014 by Community Engineer, Nick Lewis. A further condition assessment will be carried out in 2018/19 before any decision is made to resurface the runway. Initially when the airport was first developed the airport project consultants when making recommendation for future expenditure under the heading of Maintenance Projects, it was forecast around the potential of heavy aircraft traffic with a low to medium utilisation. In the foreseeable future this is unlikely to occur making some of these financial allocations either incorrect or will be pushed future out from the scope of the LTP 10 Year Plan.


Figure 7-2: Te Anau Manapouri Airport Opex Forecasts

7.3 Approach to Renewals

Renewal is the replacement (or rehabilitation) of an existing asset without changing its capacity or level of service beyond the original design.

7.3.1 Renewal Strategy

Renewal projects are identified by the Airport Manager and in consultation with an appropriately authorised maintenance contractor or service outlet. Renewal projects are prioritised by operational pressures and regulatory compliance. The renewal strategy is to review current best practise and economical and environmental considerations

7.3.2 Renewal Past Trends and Forecasts

Most assets at the airport relatively new and require only maintenance or refurbishment over the next 10 years. The following assets are subject to consideration for renewal, however, based on current knowledge, the assets budgeted for renewal in the 10 year period is the entrance road and carpark ($50,000), The main runway resealing ($294,175), the Ground Power Unit (approx. $45,000) and the ATV motorbike (approx. $5,000).

Suzuki ATV 300 Motorbike

Two portable Generators

ATV Trailer

Sound Equipment

Catering Equipment

Baggage Trolleys In 2007-2008 $4.3 million capital work was undertaken which was depreciated at 10% per year. Depreciation drops significantly in 2018-2019 as there are no significant capital projects coming up.

$0

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Maintenance Costs Operating Costs


Figure 7-3: Te Anau Manapouri Airport Renewal Trends and Forecasts

7.4 Upgrading and Developing New Assets for Levels of Service and Demand

7.4.1 Capital Investment Strategy – LOS and Demand

The last three year period has seen improvements carried out to improve the operational effectiveness and the efficiency of the airport operation including the renewal and upgrade of the GPW Approach system. No upgrades or new assets are proposed, the overall strategy is to maintain and renew the existing asset network.

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Figure 7-4: Te Anau Manapouri Airport LoS and Demand Trends and Forecasts

7.4.2 Future Improvement

The completion of two new Heli-pads.

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Level of Service Demand


8. Financial Summary The following section contains financial information for the activity which has been generated from the Council’s Fulcrum budget platform as at November 2017. All of the financial information shown includes inflation (unless otherwise stated). The costs associated with the Te Anau Manapouri Airport activity are included in the Community Services Activity Statement in the Council’s LTP. The full set of financial assumptions are included in AMP Part A and any activity specific financial assumptions that impact on the activity are listed in section 8.3.

8.1 10 Year Financial Forecast The following graphs and table summarise the financial forecasts for the activity over the 10 years.

8.1.1 Financial Summary

Income is generated through the collection and allocation of local rates with additional income generated through rentals, landing fees and ground handling charges. Income is slightly higher than operating and maintenance costs to fund future projects. In 2007-2008 the runway and buildings were upgraded at a total value $3.7 million. The forecast through to 2028 is business as usual. While opportunities have been identified in this AMP there are no definitive opportunities to warrant a change to the forecast. There is a planned renewal in 2021-2022 for releasing and re-marking the runway. Internal Revenue dips below zero from 2012 to 2015 and relates to internal interest being charged through the income line.

Table 8-1: Te Anau Manapouri Airport Financial Summary (excluding depreciation)

8.1.2 Total Income

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$0.0

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$2.5

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Renewals Acquisition-Level of Service Acquisition-Demand

Vested Assets Maintenance Costs Operating Costs

Income


Negative Internal Revenue - interest on the negative reserves prior to the loan being drawn down in the 15/16 year. Negative activity revenue - 2012-2013 and 2014-2015 years had disposal of assets.

Table 8-2: Te Anau Manapouri Airport Total Income

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Rates NZ Transport Agency Grants and Donations Interest & Dividends

Internal Revenue Activity Revenue Development & Financial Cont

Te Anau Manapouri Airport AMP 2018-2048 Page 32 R/17/4/8716

8.2 Financial Forecast Summary The table below shows the forecast for the ten years from 2018 – 2028. Operating and maintenance costs remain relatively constant other than an annual inflationary adjustment. Repairs and Maintenance includes projects on the airport building to oil spray the building in 2023-2024 which is done on a 5 year cycle and repainting the interior in 2025-2026. Funding remains relatively consistent for the next 10 years with major projects being funded from reserves.

Table 8-3: Te Anau Manapouri Airport Financial Forecasts (District-wide)


8.3 Summary of Key Financial Assumptions

It is acknowledged that there is some uncertainty in the budget forecasts, because:

The airport is a relatively new facility and therefore there is limited historic data on which to base long term forecasts; and

The long term sustainability is based on existing data with the forecast. As the majority of income is derived from rates it appears that the airport will remain viable with potential additional opportunities; and

Other factors that limit the accuracy of the forecasts are the dependency on external factors such as economic growth and tourism trends.

8.4 Valuation Approach

«Insert valuation approach»Airport. Land is valued at cost.

8.5 Funding Principles

Section 102(4) (a) of the Local Government Act 2002 requires each Council to adopt a Revenue and Financing Policy. This Policy must state the Council’s policies in respect of the funding of both capital and operational expenditure for its activities. The majority of the funding for the Te Anau Manapouri Airport is from a local targeted rate with the balance coming from Fees and Charges as follows:

Landing charges which vary dependant on the weight category of the aircraft all up maximum take-off weight. These fees are reviewed every two years.

Ground handling fees associated with the level of service offered. These fees are reviewed every two years.

Function Centre hire.

Land lease. These fees are reviewed every three years.

Te Anau Airpor 2018/19

(GST Incl)

Landing Fees

Weight category 1 < or = 2,000 $17.25

2,001 - 4,000 $34.50

4,001 - 5,700 $57.50

5,701 - 10,000 $115.00

10,001 - 20,000 $230.00

>20,000 $322.00

Helicopters $17.26

Honesty Box Landing Fees

< or = 2,000 (no GST) $17.00

2,001 - 4,000 (no GST) $34.00

4,001 - 5,700 (no GST) $57.00

Helicopters (no GST) $17.00

Overnight Fee

< or = 2,000 NIL

2,001 - 4,000 NIL

4,001 - 5,700 NIL

5,701 - 10,000 On request $57.50

10,001 - 20,000 On request $115.00

>20,000 On request $172.50

Helicopters NIL

Ground Handling Fees

The ground handling fees include runway inspection, marshalling, toilet servicing as

required and security cones.

1 MCTOW in kg


With baggage $322.00

Without baggage $241.50

With baggage (two persons assist) $339.25

Additional person $80.50

Ground power unit assistance (minimum

one hour)

$172.50

After hours call out fees $80.00

Refuelling Fees

Standard Refuelling $57.50

Additional person $80.50

Function Centre Fees

Per night fee $350.00

Bond (refundable) $200.00

Optional contract clean $200.00


9. Activity Specific Assumptions

Council has made a number of assumptions in preparing the AMP. Table 9-1 lists the most significant assumptions which relate specifically to the Te Anau Manapouri Airport activity. For assumptions which apply across Council refer to AMP Part A.

Assumption Type Assumption Discussion

Funding Funding will still come from ratings

in the Te Anau community Board

Usage Usage of the airport will not

significantly increase or decrease in

the next ten years.

Resource Consents No changes will be required when

resource consent is due for renewal

in ??

Levels of Service There will be no significant changes

in levels of service

Consideration around airport

management of non-operational

land for hanger development

Asset Condition Future condition assessments will

not indicate additional remedial /

replacement works to those

schedule in the works programme.

Table 9-1: Activity Specific Assumptions


10. Significant Effects, Risk Management & Quality Assurance

10.1 Significant Negative Effects

The significant negative and significant positive effects that the activity may have on the local community are listed is the tables below.

Effect Description Mitigation Measure

Increasing costs

would lead to

increased local

rates.

Because of the size and public ownership

of the airport the Council is always

looking at innovative ways to increase

income and use of the facility, to

decrease the cost for ratepayers.

Examples are the use of the airport for

functions such as weddings and

anniversary celebrations.

Financial

Managing the asset in a business-like

way, with a long term focus.

Table 10-1: Significant Negative Effects

10.2 Risk Management

Table 10-2 and summarises the key risks associated with this activity. The detailed risk framework and process followed is detailed in the AMP Part A (r/16/8/12686). SDC is in the process of reviewing its risk management approach and the corporate risk framework and register. This will be part of the AM improvement plan.

Te Anau Manapouri Airport

Risk Event Current Treatment Details Proposed Treatment Details

No Compliance to Civil Aviation

Rules and Associated Advisory

Circulars.

Development and

management of an internal

Safety Management Systems

(SMS) that audits the airport’s

activities compliance against

the regulators standards.

Reference and management of

process and procedures adopted by

the New Zealand Civil Aviation

Authority (NZCAA) as a base line or

minimum standard. Continuation of

SMS monitoring and external

NZCAA Audits. Joining industry

work groups such as the

New Zealand Airports Association.

Non legislative compliance for a

building that compromises

building occupation and

business activities.

The airport terminal is required

to have Building WOF's

issued. All identified

processes are in place to

ensure the Airport Manager as

building owner undertakes

checks as per compliance

schedules and IQP surveys

are completed for the issue of

the Warrants.

External contractors are employed

to carry out additional checks that

the building owner is unable to carry

out due to certification qualification

requirements.

Building maintenance is not

kept up to date which shortens

the asset life.

Buildings are conditioned

monitored resulting in

identification of maintenance

for asset protection to ensure

the appropriate asset life is

obtained. The Airport

Manager provides a monthly

assessment.

Annual assessment from a Council

Building Control Officer to provide a

report on condition and schedule of

preventative maintenance activities

associated with the assets projected

asset life.

That the airport’s aircraft

ground equipment is suitable

for their intended use and is

maintained to a high level of

serviceability.

Weekly and Monthly

serviceability inspections are

carried out by qualified

personnel. Annual Servicing is

carried out i/a/w product

Provision of consumable spare

parts is purchased to reduce the

un-serviceability downtime


maintenance procedures.

Minimising the delays and non

arrivals of aircraft movements

due to inclement weather

conditions.

The continued operation of

real time webcams and

automatic weather stations

available on the Te Anau

Airport Manapouri website. Up

to date instrument approach

system.

To have the airport manned

seven days per weeks as demand

dictates for increased Level of

Service.

Aviation business growth

opportunities at the airport are

easily able to be started up.

Land is available for lease for

commercial operations through

MGJV leases

Commercial leases are available at

a level that makes business start-up

viable.

Land options are available for non-

commercial use including part-time

residential use of purpose built

private hangars

Table 10-2: Te Anau Manapouri Airport Risks

10.3 Compliance and Quality Assurance

The purpose of this section is to demonstrate that a quality assurance process for the development of this AMP has been undertaken to ensure compliance with the requirements of the LGA 2002 and any other applicable requirements. An initial meeting was held with relevant internal stakeholders on site to determine works programme and budget implications. The AMP was drafted and then submitted to the Airport Manager, Strategic Property Manager and Community Engineer to review and provide input. A Quality check is planned and will be outsourced. Formatting checks will be in place once the final draft if completed to ensure uniformity with all other AMP’s.


11. Activity Management Plan Improvement

This section summarises the AM practices (data, systems, processes) applied to AM planning. It assesses the current and desired level of practice in relation to the ‘AM Maturity Index’2 and identifies an improvement programme for the next three years.

11.1 Progress against Previous AM Improvement Programme

As the Airport Asset has only one prior AMP there is limited historical data to record against. Improvement Task Priority3 Resources Timeframe Update

from Last AMP 2015-2012

Customer Service Survey

Correlate information on how the airport performs against other similar airports

Utilise information off landing data for potential customers

High Internal

Staff Five Days

Winter Months

Asset Monitoring High

Internal Staff

One Day Monthly

Monthly

Financial Strategies

Look at ways to reduce costs, maintain

Levels of Services and work efficiently

High Internal

and SDC Staff

Annual Budget

Risk Assessment Medium Internal

Staff Ongoing

Monthly

Table 11-1: AM Improvement Plan from AMP 2015-2025

11.2 Assessing Current and Desired AM Practices

11.2.1 Understanding and Defining Requirements

Current Status Future Status and Identified

Improvements

Levels of Service

and Performance

Management

Core

The airport operates to a Level of Service that

the asset is capable of providing.

Implement a customer service survey of

the 10 most regular airport users. Align

this airport with current industry

standards and work towards next Level

of Service.

Demand

Forecasting

Core

The airport has just reached Operational

Functionality, there is little demand statistics.

Summarise historical usage. Look at

past demand and focus further

development on focused demand.

Investigate reasons for poor performing

areas of airport usage and implement

changes to increase utilisation. Provide

targets.

Asset Knowledge Minimum

Status of current infrastructure.

How fit for purpose is the asset.

Have a better understanding of asset

life through industry knowledge.

Implement Preventative measures.

2 NAMS International Infrastructure Management Manual, 2011 3 High - must be complete this year. Medium - complete in three years Low - review need in three years.



Improvements

Keeping up to date with industry

development and new equipment and

best practise.

Condition

Assessment

Core

Monthly inspections are being carried out for

ongoing assessment of assets condition.

Progressive.

Maintain to current industry standards

including third party audit.

Implement a formal annual condition

assessment regime including robust

documentation.

Risk

Management

Core

The top five risks have been identified in basic

form with proposed treatments implemented

and monitored.

Establish a Risk Register, regular

monitoring and issues reported to

Airport Manager. Implement Risk

Matrix for introduction of new activities.

Established SMS system.

Table 11-2: Understanding and Defining Requirements


11.2.2 Developing Asset Lifecycle Strategies


Improvements

Operational

Decision Making

Advanced

Emergency Response Planning

Annual exercises with follow-up debrief

New activity meetings with airport staff and

industry representatives

Training with the Invercargill Airport.

Aircraft emergency exercises with

Alliance Airlines

Capital Planning

and Decision

Making

Minimum

Based on reactive operational requirements

Gauging industry developments and

demand.

Industry best practise.

Financial

Management

Core

Annual budget reviews with Council financial

departments and airport management staff.

Monthly reporting to local Community Board.

To include capital planning into future

budget plans.

Table 11-3: Developing Asset Lifestyle Strategies

11.2.3 Asset Management Enablers


Improvements

The AM Team Minimum

Currently the asset is managed through

contracted Airport Manager with consultation

with Council for larger projects.

Core

Further ongoing training in AM.

Further external consultation.

AM Service

Delivery

Core

Due to the size and scope of asset and

operational activities, contracted services are

utilise.

Intermediate

As asset become more profitable

transition from contracted staff to

internal staff.

AM Information

Systems

Minimum

Sound theoretical knowledge to minimum

standard.

Core

Development of register accountability,

tracking / life cycle reports and

replacement budgets.

Quality

Management

Intermediate

Monitoring of Regulatory Standards with

quarterly reporting.

Intermediate

Maintain standard, extend to all

operation not just regulatory standards.

Approval of SMS System through CAA.

Improvement

Planning

Minimum

Regular asset monitoring.

Quality Assurance System.

Core

Annual review of improvement plan.

Table 11-4: Asset Management Enablers


11.3 AM Improvement Plan

Improvement Task Priority4 Resources Timeframe

Customer Service Survey

Correlate information on how the airport performs

against other similar airports

Utilise information off landing data for

potential customers

High Internal Staff

Five Days Winter Months

Asset Monitoring High

Internal Staff

One Day

Monthly

Monthly

Financial Strategies

Look at ways to reduce costs, maintain

Levels of Services and work efficiently

High Internal and

SDC Staff Annual Budget

Risk Assessment Medium Internal Staff

Ongoing Monthly

Table 11-5: AM Improvement Plan

11.4 Ongoing Monitoring and Review

As part of the Operations Management Progress reports, Asset Management can be included and monitored.

4 High - must be complete this year. Medium - complete in three years Low - review need in three years.

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