KEY POINTS:
Rival investors are still wanting to bid for Auckland International Airport, despite a merger proposal from Dubai Aerospace Enterprise (DAE) yesterday getting the backing of the airport's board.
Canada Pension Plan is now understood to have begun its due diligence on the airport and Macquarie Bank - as part of a consortium - remains in discussions with the board.
Should we let foreign interests buy the airport?
Here is the latest selection of Your Views:
Think
The consequences of globalisation are both positive and negative. Infrastructure as prominent and significant as an airport should not be made available for international purchase. All valid arguments aside, any adept, functional mind should be able to envision the realities of such a decision.
Mohammed (Taupo)
Dubai has long been a commercial hub for traffic between the Arabian peninsular and the Asian sub - continent across the Arabian Sea. Having seen from Singapore how city - states can continue to flourish in the twentieth and twenty-first centuries, Dubai seeks to maximise this experience by making a number of strategic investments overseas, of which Auckland Airport happens to be just one. The benefits of the incoming investment in terms of jobs and prosperity at a time when the New Zealand economy is facing decline through the maintenance of a high exchange rate, and the consequent failure of New Zealand companies who, for the most part lacking in high value-added products, cannot compete in international markets, should not be underestimated. On the other hand it is heartening to see so many of your readers in agreement with the Bush administration by reaffirming the denial of the transfer of sensitive assets to foreign (especially Arab) interests.
Peter MacArthur
Al Qaeda financiers want to buy in to Auckland Airport, are we barking mad? Get real New Zealanders!
Huia (Gold Coast)
Selling off NZ assets has been seriously going on since 1984 and the pace has only accelerated. What should have been dumped long ago was Air New Zealand an expensive liability. Let the market forces prevail and private enterprise will take care of the business.
In this case the dealmakers and middlemen will make a killing and life goes on. Prices of everything in the airport will go up to pay for the sale and the new owners can legally rob all shops and lease holders' blind. One day future generations will be saying, our grandparents must have been so dumb to sell off NZ to foreigners but when it comes to human nature there is nothing new under the sun. We have just got smarter at doing dumb things and it's to benefit a few at the expense of many. In this case part of the deal should be a price freeze on all leases out there for 3or 4 years. I wonder how attractive the deal becomes then?
Isaac (Onehunga)
Anyone who has been to Dubai or seen the Dubai Airport will know what an impressive and grand looking terminal it is. Dubai itself really is impressive and it is amazing what money can build and buy. The offer by Dubai to buy Auckland International Airport should be seen as an opportunity to further develop and significantly improve Auckland Airport, far beyond what limited ratepayer funded resources that the local councils have. Travellers want the best value and service for their money. Dubai can offer that. Dubai based Emirates Airlines has some of the best aircraft and best airline services in the world and with Dubai Aerospace deciding to invest in Auckland, an opportunity may be made for Emirates to establish an operational base in Auckland. Such a base would provide jobs for New Zealanders, unlike the NZ owned Air NZ who just shafted all their engineering staff by outsourcing them. The money the councils would receive from the sale of their shares could then be put towards paying off debt and reducing the burden of rates on the people of Auckland, or put towards creating another airport at Whenuapai to compete with Auckland International Airport.
Dorothy (Parnell)
Everyone should read Brian Gaynor's column in the Herald Saturday 28th July 2007. He explains why we should never sell a strategic public investment or utility. When either is privatised or sold overseas the main objective is to return all the income to the shareholders, so investing money in upgrading the infrastructure becomes of secondary importance. We have already sold our most important utilities so we are left with third world broadband and telecommunications, electricity supply (Vector) and railways. We must be sensible and safeguard the economic future of our country!
George
New Zealand should think really in this way. What this Arabs are producing in terms of services or manufacturing. The more we open our economy to this sector the more we are vulnerable to many security concerns and standard of living. They have no way to enter Australia and find this as a rear door. More over the plans to penetrate New Zealand economy has been tuned and premeditated long before with DNATA hiring a kiwi to the top position. Also the directors of AIAL looks so lucrative in this deal (having dinner with sultan and the week after announcing the deal), unanimously flattering the potential buyer without pointing anything pessimistic about the deal. Arabs have a fine account of trading and bargaining for them. Taking into account all these circumstances its getting hard on every aspects of life, rising mortgages, high petrol and commodity prices, poor health and many in the list not but least, the lowest wages in OECD.
Mere (Mangamahu)
I think Dubai would be a better option than the Canadians, who do not have a good track record in NZ.
Durstman
Seems like everyone has lost there morals. Just because Dubai is a country with money flooding it, it does not mean they are a respectable innocent country. Some Kiwis are away with the faeries this is not just a case of a foreign company buying half the shares in your biggest international airport but a company that comes from a country that funds an ideology that is full of hate for the west. Even though UAE may be one of the most westernised Middle East countries, blood is always thicker than water and they stick to their roots.
Bazza
Why don't we just sell New Zealand, or have we done that already?
Judith
Absolutely not. If the airport is owned by a majority foreign company, what system of Law will prevail should a major catastrophe happen such as a crashed A380 with 600 passengers on board at or near the airport? Such a law-suit would cripple the NZ economy making compensation on such a scale. Would a law-suit go to the International Court - whoever that is, and who knows what their policy may turn out to be? Not only will NZers lose ownership and control, they will lose the sovereignty of deferring to the NZ justice system, which today, still remains based on Objective principles, thank goodness.
Matt F
New Zealanders do need to wake up to the realities of international ownership of infrastructure assets. What is important is not who owns them, but how they are run and the level of utility the asset provides to the local and national community and economy. Often a foreign specialist investor is in the best position to maximise these benefits through deep pockets and industry expertise. Local detractors of any potential DAE deal should ask themselves whether they would equally criticise a New Zealand investment company for buying shareholdings in foreign airports, such as Infratil has done in Scotland, England and Germany.
Chas2268
With regard to the Dubai bid for the Auckland Airport, firstly, why are companies allowed to disguise takeovers as 'amalgamations', thus requiring only 75 per cent shareholder approval? The large private investment funds, who appear interested only in capital gains, then outvote the smaller shareholders, who are satisfied with the dividend return and wish to hold on to the shares. Secondly, the directors are recommending the takeover. Is it a coincidence that they also have just announced a reduced profit, a reduction, which strangely, is equal to the increased money required for incentives to the senior management of the company? Next, how big are the other incentives to the board for recommending the takeover? The Waste Management debacle should have been a lesson for the regulators. Lastly, Who will be next? and what companies will remain for the small shareholders to invest their money? When most of our large companies are controlled from overseas, where will the money come from to pay all those profits to foreign companies?
Mama Mia (Auckland)
No way. Not only has the Arabs got a stranglehold on the Western world by a near monopoly on oil, which they can turn off and on at will, as they have previously done, but to also let them control our airports is sheer madness. Any Kiwi politician trying to sell off our airports that way should be tried for gross treason, simply because you cannot try people for being stupid.
Dr B, overseas
Ok, so the pro-arguments all seem to run: People against are small minded bigots and blowhard politicians, and letting foreigners have a controlling interest in the airport won't hurt us any. After all, foreigners own most of the banks, etc.
On the con side: Dubai is incredibly wealthy, makes smart investments, and wants to buy this airport - so they can make a profit from it. Logically, then, any money that comes in from the sale is going to be LESS than what flows back out to the company that wants to buy it, because that's how companies work. Why not keep it local, and just do the same sorts of things they proposed and keep the profit local too?
There is no xenophobia in wanting to increase the flow of money into the country rather than out of it.
Pete
NZ has a bad habit of selling assets (especially the monopoly ones) to foreign people. It would not surprise me if this recent tease succeeds. But you just have to think back to Telecom and see how rundown we are now. You can trust a monopoly to be profitable, whether it is owned locally or otherwise - unfortunately the same cannot be said to the benefits being passed on to the people.
Geffe (UK)
First thought in reading this was we cannot let this happen! Do people not understand that this company has been trying desperately to get into this market for a long time? Our government has already near crippled Air NZ by allowing the free skies policy which allowed a dozen or so airlines to touch in NZ, refuel, pick up some cheap Kiwi travellers and take them to their end destination, Australia. Now all that will happen is they will do the same to the US. These people have no interest in the wellbeing of Kiwis, they are money hungry and have one single intention of dominating the world skies and making Dubai a major hub, pretty easy when you get free fuel. Why not smack Air NZ in the face after all their efforts in the face of adversity and fierce competition and watch that reasonable $25 dept tax triple in no time.
Susan Norwood
I'm sure that Australia has a very solid reason for retaining their national ownership of their own airport. How can there be such a thing as national identity if false prophets i.e. the current government is only focusing on the 'mighty dollar' and the bigger picture is completely ignored. That is, control by a Middle Eastern country with more money than sense and a totally different culture to boot. Talk about selling out! A foot in our door would look very appealing indeed! It would be sheer stupidity, in my view, to allow a sale to proceed.
Mario
Of course New Zealand should spurn the advances of overseas investment. How else is it going to retain the view of the rest of the world as an isolated little dump with a bitter and twisted population constantly in conflict with itself, albeit a place that's nice to visit for the scenery, but nowhere one would really want to live.
Auckland
Decisions on share ownership of the airport need to consider the benefits that different share owners could potentially bring to the airport business, and hence to the city and the country. For instance can the current local government shareholders, in the decades ahead, contribute any meaningful synergy value to the airport? Probably very little, if any at all. What synergistic value is Dubai Aerospace Enterprise willing to contribute, when pushed. Privileged access to fuel in a an increasingly fuel scarce future? A stronger supply line for tourists coming to New Zealand? Sufficient passenger volume to place Auckland airport as a recognised international hub. More questions need to be asked yet. Including the question as to what people really want when they seek to retain control within NZ. If we understand the explicit benefits they are seeking to retain, it may be possible to retain these, and to also gain synergy from the involvement of a new offshore shareholder.
More: http://onfull.blogspot.com/2007/07/dubai-and-auckland-airport-ownership.html
Sylvester
The views expressed such as those by Rick are typical of a complacent majority with no idea of how the real world works. Local councils, with their steady stream of taxpayer - funded revenues are not, and should not be in the high risk business of deciding whether to invest in Auckland Airport's failing infrastructure. They will always take the short term view of protecting their dividend payments to placate the electorate rather than opt for building a global hub, the new employees of which are unlikely to be producing revenue in time for next year's budget.
Walter
Why sell more NZ assets, which other people/companies so desperately want? Make this country richer, not poorer.
Paul Ahipara
Councils should spend the airport windfall in fixing up the infra structure instead of using profits from the airport to subsidise the rate payers running costs. Socialists love control and the government owning things which history shows they make a big mess of. As one of many owners of Sydney Airport it seems to run very well in private hands, many of them foreign like me.
Doug
I would have to say no to the sale and keep the majority of the airport in New Zealand ownership. Having said that however, I do think that AIA should increase slots for Emirates to create a possible hub as it could do wonders for the city and the country as a whole.
Bossie (Auckland)
New Zealand have smelled the possibility of oil reserves in the South Island and all sorts of interesting unknown family and friends suddenly knock on the doors for a friendly visit, even an injection of investment, maybe a few presents in the process to soften things up and raise relation expectations. First our prime minister is invited to the white house to calm the dust around anti-nuclear issues from the 80s, then suddenly we see Fly Emirates on one of New Zealand flagship sporting events. Now suddenly a majority stake in its main hub/airport under the banner of Fly Emirates. Brilliant strategic move to oil bosses. Are we really going to fall for this? In the end, war in Iraq recently, like war in Angola in the 90s against the Cuban invasion was all about oil and resources. Today about 180 oil rigs from American oil companies are protected by an air force base in the North of Botswanna, across the border from Angola, the so called peace force. So is this really about strategic investment or is it more like, "If I grab a country by its most important private parts I can squeeze the direction of future development and investment and even look friendly and investment wise helpful in terms of the countries needs?" Wake up NZ, this is planet world after all and there is a reason why oil companies take up majority of the top 10 slots on the Fortune 500, suddenly interested in our greener oil pastures. How else would you approach New Zealand to get grip on the beautiful prospects of more black gold, we are friends after all aren't we, so lets' look over pollution, the fact that our interests are 100 per cent opposed to each other and by the way anti-democracy is not important because financially this is a brilliant move in the interest of both countries, isn't it!
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