28 July 2005

Suspensory loan for Invercargill Airport

The government has approved a suspensory loan of $1.5 million to enable Invercargill Airport to gear up for international flights.

Announcing the decision today, Finance Minister Michael Cullen said the funding would go toward buying biosecurity and aviation security equipment, including luggage x-ray facilities.

“I recognise that this creates a precedent for other regional airports wanting to move up to international status and do not rule out providing them with similar assistance, other conditions being equal,” Dr Cullen said.

“The money will become available if and when Invercargill persuades an international airline to provide regular, scheduled services to the city. The airport has yet to secure this but is in discussions with both Pacific Blue and Qantas.”

Dr Cullen said Invercargill was further advanced in its international ambitions than other areas. It already received diverted flights when weather conditions closed Queenstown Airport and was in the process of extending its runway; a $4 million project being financed by Invercargill ratepayers.

Under the border security funding formula announced in April, biosecurity and customs are paid by the government and aviation security costs by the travelling public through a uniform $9.31 charge.

New international airports, however, have to carry their own costs for a probationary period of one year. After that, they will be brought into the funding regime provided they can meet the threshold of 9000 departing passengers a year.

Dr Cullen said the loan to Invercargill was for three years and would be repayable unless it met these passenger volumes.

ENDS

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