2019 Pricing Consultation

Airways Corporation of New Zealand Limited Pricing for the 2019-2022 Period

2.B. Technology – Providing safer and more efficient tools The combined domestic and oceanic platforms will be operational by mid-2021. Figure 14 provides the financial summary of the technology components of the business transformation programme.

Figure 14 – Technology transformation financial summary

$m

FY17– FY19

FY20 FY21

FY22 FY20– FY22

FY23– FY28

Total

Capital projects: ATM system

32.5

25.9

58.4

16.9

7.7

1.3

5.4

5.6

13.0

Voice switching

2.5

1.0

2.1

2.0

Total capital investment

37.9

19.4

8.7

3.4 31.5

2.0 71.4

Operating costs: One-off training & transition

4.5

4.5

2.0

2.5

0.4

1.6

Ongoing support

0.2

0.2

1.2

Total operating costs

2.0

2.7

0.2

4.9

1.2

6.1

2.C. Buildings – Two locations providing increased resilience The construction of the new centres is due for completion in 2019. Following this, the transition programme will be implemented and hardware for the new ATM platform and other operational equipment will be installed. The site acceptance test for the new ATM system will be run in December 2019 followed by stability testing and operational shadowing in early 2020. The training programme will prepare the technical and operational staff for a domestic service cut-over in July 2020, with the Oceanic cut-over taking place in 2021. Figure 15 provides a financial summary of the buildings transformation programme.

Figure 15 – Buildings transformation financial summary

$m

FY17– FY19

FY20 FY21

FY22 FY20– FY22

FY23– FY28

Total

Capital projects: Technical transition to new IL4 buildings

1.8

2.1

3.9

2.0

0.1

6.3

0.7

7.0

New Auckland building fit out

0.7

Total capital investment

8.1

2.7

0.1

2.8

10.9

Operating costs: Property leases

17.1

46.8

5.9

5.7

5.5

29.7

0.2

0.2

One-off transition costs

0.2

Total operating costs

6.1

5.7

5.5

17.3

29.7

47.0

20

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