Opposition grows to Queenstown airport deal

Air NZ’s critique of Auckland-Queenstown tie-up foments local opposition

July 26 (BusinessDesk) – Air New Zealand Ltd.’s criticism of Auckland International Airport’s investment in Queenstown’s gateway has encouraged a local backlash agai9nst the tie-up in the alpine tourist town.

The purchase is being criticised by a group of about 15 Queenstown businessmen including former mayors Warren Cooper and John Davies, Skyline Enterprises chairman Ken Matthews and SBS Bank chairman Acton Smith. Cooper has called for an official investigation by either the Ombudsman or the Auditor General, an investigation Air New Zealand says it would support.

Three Queenstown Lakes District Councillors are also apposing the purchase, according to the Otago Daily Times.The national carrier said on Friday that it wants the Commerce Commission to overturn Auckland Airport’s purchase of a 25% stake or, failing that, wants airlines to be allowed to invest in the Queenstown airport as well.

Auckland Airport paid $27.7 million for its stake in Queenstown Airport, a deal announced on July 8. Queenstown Airport, following approval from Queenstown Lakes Council, may exercise an option for the Auckland airport to increase its shareholding to between 30% and 35% at any time up to June 30, 2011.

Bruce Parton, Air New Zealand's Australasia group general manager, says he isn't surprised at the level of community and business anxiety over the Auckland airport's investment.

The Auckland airport “has displayed significant greed over several years and is adept at fleecing travellers: it would be naïve to think it's not aiming to increase airline and airport charges which will ultimately increase the cost of travel into and out of Queenstown,” Parton says.

If airlines were allowed to invest in Queentown airport, it would gain “investors who genuinely understand how to grow tourism into Queenstown – by keeping the cost of travel down,” he says.

By contrast, the Auckland airport has “a track record of gouging users like airlines, taxi and rental car companies to the point where they have to put up the cost of travel,” Parton says.

Air New Zealand is prepared to lead a consortium of airlines to buy into the Queenstown airport.

Auckland International Airport shares were unchanged at $1.96 in morning trading while Air New Zealand's shares were also steady at $1.11 after earlier gaining 1 cent.

(BusinessDesk)

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