Yesterday’s comments from Dunedin City Holdings Limited (DCHL) chairman Tim Loan were made the same day the Airports (Cost Recovery for Processing of International Travellers) Regulations 2025 came into force.
The new regulations set charges an airport must pay when beginning or resuming operations as an international airport, which would include Dunedin Airport, where Jetstar’s new thrice-weekly Dunedin to Gold Coast service is scheduled to launch in June.
When asked by Deputy Mayor Cherry Lucas at a Dunedin City Council committee meeting yesterday what financial impact the regulations could have on the airport, Mr Loan said he could not disclose the answer publicly.
"But we are pushing back very strongly."
The airport was somewhat challenged because it was half-owned by the Crown, and Mr Loan believed it would welcome support from its other shareholder — DCHL, which is owned by the council — in terms of making a plea to the government, he said.
"It does feel like Dunedin is getting another fairly rough deal from central government in relation to this.
"There are other airports that closed international services during Covid and have been able to reopen them without being charged these sorts of costs."
Dunedin Airport believed their cost of servicing international travellers was already covered by the levies imposed, and the regulations were, in a sense, "a little bit of double-dipping," Mr Loan said.
"The long story short is that [Dunedin] airport certainly sees this could be an opportunity for DCC to assist them in lobbying government."
The regulations only apply to the establishment costs from setting up the capacity to process travellers at new or restarting international airports, incurred by the Ministry for Primary Industries (MPI) and the New Zealand Customs Service.
These can include physical alterations to the airport, vehicles, passport readers, e-gates and kiosks, baggage screening equipment, x-ray and scanner machines among others.
The regulations do not cover processing costs, involving the ongoing costs of processing international travellers.
New Zealand Airports Association chief executive Billie Moore said establishment costs were "significant", but she was confident airports would work through them as best they could to ensure the certainty of international flights.
While it was not a desired outcome, and would still make it very difficult for airports to balance their books, it was "much, much more manageable" than the alternative.
"The option of having to cover both establishment and processing costs ... I would have expected the flights not to proceed.
"At least the option we've landed on, it still meant that the flights remain viable, which is still good to see."
Ms Moore previously estimated each affected airport may have to pay from $1 million to $2m towards border control.
A customs document, dated December 18 and released under the Official Information and Meetings Act, said a "significant proportion" of equipment and technology in Dunedin Airport were "either at the end of its life, is no longer fit for purpose, or does not adequately provide for staff health and safety requirements necessary for border operations".
Dunedin Airport chief executive Daniel De Bono said yesterday the airport was working through the impacts of the regulations and declined to comment further.
Earlier in the meeting, Cr Steve Walker said recent changes to morning and evening Air New Zealand flights between Dunedin and Wellington were "a huge hit for this city" in terms of both reputation and business efficiency.
Mr Loan said the airline had signalled they expected the issue to be resolved by the end of 2026, but this did not mean the services could not return before then.
Dunedin Airport was advocating "very strongly for that" with Air New Zealand, but was also engaging with Jetstar on the issue about its services, he said.
