Tricky slalom for watchdog

The unseasonably fine weather of the past fortnight coinciding with school holidays is good and bad news for skifield operators.

The good news is that great holiday weather brings folks out. The bad news is that the snow has melted, or is melting fast.

The question must be asked whether the the North Island skifields at Whakapapa and Turoa on Mt Ruapehu have a future.

An only fair season last year following on from a poor one in 1998 on top of the disastrous disruptions from volcanic eruptions in 1995 and 1996 tipped Turoa into receivership in March.

Whakapapa operator Ruapehu Alpine Lifts has agreed to buy Turoa despite already being refused permission to do so by the Commerce Commission on the grounds that it would give Ruapehu a monopoly on North Island skifields.

Ruapehu is about to apply to the commission for "an authorised exemption" where it will argue that the public benefits of keeping the skifield afloat outweigh public detriments. It will also relitigate its argument that the North and South Islands comprise one market.

People now rather too old for skiing remember without fondness how Ruapehu operated Whakapapa as a monopoly before Turoa opened.

Ski enthusiasts set up the company in 1952 as a non-profit, unlisted public company.

The shareholders, who shelled out at least £20 each, took their dividends on the skifield.

They operated an iniquitous "members" scheme whereby there were separate shareholder and public queues. At busy times, four or five shareholders went on a lift for every one of the public.

This scheme made Ruapehu about as popular as the mud that periodically flows from the mountain top. It finally dropped the scheme when the Department of Conservation threatened to withdraw its operating licence. After all, Mt Ruapehu is part of Tongariro National Park.

The other aspect was service, or lack of it. The improvement in service on Air New Zealand when Ansett came on the scene in 1987 was nothing compared with the improvements at Whakapapa when Turoa opened.

Will history repeat itself?

Ruapehu chairman Tomas Huppert, a former New Zealand Olympic skier, says no.

"We genuinely believe that it would be far better for the public to have a joint ownership of the two skifields because of the synergies we can share with the public."

These would include having one pass for the whole mountain, connecting the fields by ski-track and economies of scale in marketing and sharing facilities such as snow groomers.

Competition comes not just from the South Island fields but resort areas such as Bali and Fiji (in the absence of coups).

Mr Huppert said Air New Zealand owned the Mt Hutt, Coronet Peak and The Remarkables skifields and offered very attractive deals, including free, or heavily discounted, air fares or lift passes.

Even Australian skifields are a threat. Victoria is enjoying its best snow in 23 years, and big fields such as Falls Creek, Mt Hotham and Mt Buller, and New South Wales fields Thredbo and Perisher Valley offer far superior facilities to those New Zealanders put up with.

Ruapehu as a company is a strange beast. Shareholders invest for their love of skiing. By constitution, all profits are reinvested in the company, no dividends are paid and directors are not paid fees.

Whether such a structure is sustainable is a moot point. If the company was given permission to take over Turoa, it would have assets of considerable value.

Mr Huppert, a former Brierley Investments executive, said his motivation was to give something back to the sport that is his passion.

"If we were there for the money, it would change the culture of the place," he said. He would be saddened if the non-profit structure was changed.

The way Ruapehu has been structured is part of the reason it has survived the adverse circumstances of the 1990s.

Before the ANZ Bank put Turoa into receivership, the skifield was owned by the Melbourne-based Moore and Grimwade families who apparently used it as a cash cow, without reinvesting much.

Mr Huppert believes Ruapehu would have to spend an immediate $1 million just to bring Turoa back to adequate standards.

Ruapehu hopes the Commerce Commission will make its decision by the end of October.

- NZPA

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