Auckland Airport boss Adrian Littlewood: Why the pressure’s on to co-exist with Covid-19

Auckland Airportboss Adrian Littlewood says business and the Government need to use every day possible to work on a strategy to further open the border safely but be prepared to live with Covid-19.

He said the aviation sector had minimised the aircraft safety and security risks in the past and the same principles needed to be applied to dealing with Covid, which he says will be a long-term threat.

”This is going to be around for a long time.We’re going to have to learn to live with it – this is a marathon effort.”

The airport today said it could be more than three years until international travel recovers to last year’s levels but finding a way to co-exist with the disease should be worked on urgently.

”From a people and trade point of view we can’t stay hermetically sealed from the rest of the world but we have to find a way to do it safely.This is a complex problem that requires a sophisticated answer.”

The pandemic has ravaged air travel and last month international passenger numbersthrough Auckland Airport weredown 97 per cent.

Littlewood said fully restoring domestic, Australian and Pacific Islands travel would get passenger volumes back to 75 per cent of where they were pre-Covid.

”Aviation is inherently risky but through decades of continuous improvement across aviation with security, customs and immigration and biosecurity in New Zealand we’ve built up those layers of protections,” he told the Herald.

”We need to take thesame philosophy to safe borders and virus management.”

After the 9/11 terror attacks new safety measures were implemented at different speeds around the world, and governments and the aviation system did eventually come up with a consistent approach.

”The virus it is much harder to find and manage [but] we need to take thesame philosophy to safe borders and virus management,” said Littlewood.

He could understand public concern about any relaxation of the border regime and around the world every country was wrestling with how to manage them.

Some countries were accepting pre-flight testing for Covid or antibodies and there were different approaches to quarantine. There would be ”no silver bullet” toCovid-19 asa vaccine may not be entirely effective, take-up may be slow and there were distribution challenges.

His company was part of a group of about 40 organisations that had worked on a transtasman bubble. A one-way arrangement into New South Wales and the Northern Territory had started and Littlewood said work was still being done on a two-way bubble.

The aviation industry hadworked closely on safety protocols for domestic flying under different alert levels.

”We were able to run a full plane at level two if you were to add extra protection – mask use, sanitiser, no food. I think what we demonstrated – and we continue to work with the government and partners to show – [is] there is a path to manage risk over time.”

He could sense the Government’s strategy slowly shifting as it learns more about the virus.

”The strategy from the start was to relieve the risk to the public health sector but if this is going to be around for years – let’s hope there vaccine will be as effective as it can be – but we’ve got to put other protections in place.”

Figures from health authorities this week show NSW, with a population of 8 million, had done 2.9 million tests while New Zealand with a population of around 5 million had done just over 1 million tests.In Victoria where the virus had spiked there had been just under 3 million tests in the state with a population of around 6.2 million.

Long haul to recovery

Auckland Airport says it doesn’t expect an immediate international aviation recovery.

Chairman Patrick Strange said the past year was the toughest in the company’s 54-year history and the future was uncertain.

“Our financial performance is strongly linked to international arrivals and departures, and while there is no doubt that international travel will recover, it’s not clear how quickly,” he told the company’s annual shareholders’ meeting today.

“While both IATA [International Air Travel Association] and Standard & Poor’s have forecast a full recovery of international travel in approximately three years, at this stage we continue to think it prudent to take a more conservative approach,” Strange said.

”We believe a full recovery could well take longer than three years.”

The company hoped that domestic travel would return to normal within two years.

”And we believe that we will see quarantine-free travel both ways across the Tasman and to the Pacific Islands earlier.”

That high degree of uncertainty prompted the company to suspend underlying earnings guidance for the 2021 financial year. It will reassess this decision at its interim results in February.

The company is not paying a dividend for the first time since being listed 22 years ago.

Strange said dividends were paid out of surpluses and there was no surplus.That was the risk shareholders took, he said.

Covenant waivers negotiated with banks also prevented the company paying a dividend.

During the past year, the company’s share price peaked at $9.48 before falling to a low of $4.26 in March as the pandemic hit. It was trading at $7.36 today.

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