Council keen to keep airport stake

The majority shareholder in Hamilton International Airport has no plans to sell its 50 per cent stake while work on an upgraded terminal and extensions to the runway are uncompleted.

Hamilton Mayor Michael Redman said the city council believed its shareholding, valued at more than $10.8 million, was strategically important for the region.

Waipa, Matamata-Piako, Waikato and Otorohanga district councils own the balance of the shares.

The airport's annual report, out this week, showed a $490,000 pre-tax surplus -- up $123,000 on budget but down on last year's $526,000.

After tax the surplus was $238,000, against $350,000.

However international passenger numbers were down 2.8 per cent to 107,842.

Hamilton City Council has ambitious projects on the drawing board, including a $30m central business district upgrade and a $40m redevelopment at Claudelands.

Selling assets would go some way towards paying for them, but Mr Redman ruled out selling the airport shares.

"That's not on the agenda," he said.

"The airport is so strategically important to us. The shareholders think we have to make sure the strategic role and value are maintained and enhanced."

Once the $15.3m terminal upgrade and 240m main runway extension were complete, then there could be an opportunity to look at selling.

"We don't believe the value of our investment in the airport is anywhere near the value that we might be able to get in the future," Mr Redman said.

The council also has a 42 per cent -- $10m -- stake in Hamilton Riverview Hotel Ltd, a joint venture with Tainui Development and international hotel company Accor. It operates the Novotel and will build the $20m 126-room Ibis Hotel.

Mr Redman said the council could also consider selling its share in the Novotel now it was making money, he said.

"There will be a point in the near to medium future where we think that investment has matured. We'll consider that. The Ibis development at the moment is the focus."

- nzpa