Govt weighing airport share sell-offs

Kathy Webb
The Government could sell its half-share in Hawke's Bay's airport.
Finance Minister Michael Cullen says Cabinet is "considering the wider issue of whether the Crown or local government bodies are best-placed to hold interests in joint-venture airports".
Runway extension campaigner Simon Nixon of Havelock North wrote to Mr Cullen, asking if the Government would sell its half share in the airport to Hawke's Bay interests. The Napier and Hastings councils own the other half.
Some in Hawke's Bay local government, including Napier mayor Barbara Arnott, regard the airport's ownership as a crucial issue for resolution before decisions can be made on whether the airport should be enlarged to handle jets and direct trans-tasman flights.
The Government's half-share ownership means the councils cannot borrow against the airport's assets to develop it, while the airport authority, which takes care of the day-to-day running, cannot spend more than $5000 without specific approval from the Government.
Mr Nixon also asked Dr Cullen whether the Government would oppose development of the airport for direct trans-tasman services.
Dr Cullen replied that he would not oppose an extension of the runway as long as there was a sound commercial basis for it.
He had no power to prevent international flights to any airport as long as it met all regulatory requirements.
"It is unlikely, however, that the Government would provide funding for an extension. Rather, HBAA would need to secure funding from its own resources or from commercial funding sources," he said.
Mr Nixon has asked the Government to put up $1m to bring the airport up to the same standard as it did for other regional airports around New Zealand, which made it easier for them to do their own developments to international standard. The Government owed that much to Hawke's Bay, he said.
He was heartened that Dr Cullen, in his letter, had not definitively ruled out cash for an upgrade.
Mr Nixon said he did not see the airport's present ownership structure as a barrier to development, because there was nothing to stop the Napier and Hastings councils putting up money on the basis of the wider economic benefits it would bring to the region.
Air New Zealand stated this week it would not provide trans-tasman services to Hawke's Bay because its research indicated the region did not have a big enough travelling population.
The airline's group general manager, Rob Fyfe, said price and frequency were the key factors in stimulating market demand, and Hawke's Bay was being well-served by Air New Zealand in that regard.
The availability of some lower airfares had increased Hawke's Bay passenger numbers by 49 percent in the past 30 months, and new Bombardier Q300 aircraft would soon increase seat capacity by more than 70 percent, he said.
Hastings mayor Lawrence Yule plans to ask some Australian airlines - Qantas, Jetstar and Pacific Blue - to consider direct trans-tasman flights to the Bay. That would allow Hawke's Bay travellers to bypass Auckland and Wellington and use Sydney, Melbourne or Brisbane as a hub for international flights further afield.