Air NZ backs down over airport's stake in Queenstown

File photo

Air New Zealand, the national carrier, has backed out of legal action over Auckland International Airport's stake in Queenstown Airport.

Deputy chief executive Norm Thompson said Auckland Airport's decision to keep its stake at just under a quarter mitigates many of the airline's concerns, and both it and the Queenstown Community Strategic Assets Group have dropped their cases against the gateway.

"It has become clear as we prepared for the case that this would be a long and expensive battle which could cost several million dollars for all involved," Thompson said in a statement.

"We are pleased that we have achieved success on the eve of the case heading to court."

Auckland International Airport's grab for more than a third of Queenstown Airport has fallen over as public opposition put too much pressure on the local council to go along with the plan.

In March, Auckland Airport and Queenstown Lakes District Council cancelled a subscription agreement for the national gateway to lift its share in Queenstown Airport to between 30 per cent and 35 per cent from its current quarter stake, and its investment sparked a local backlash.

Air NZ said no further comment will be made at this stage.

Shares in the airline were unchanged at $1.13 in trading today, while Auckland Airport stock was unchanged at just above $2.29.