Christchurch airport income benefit stressed
Any sale of Christchurch International Airport by the city council to help fund the building of large infrastructure assets would remove a large dividend flow to the city, airport chief executive Jim Boult says.
The airport has commissioned an economic study to show the importance of the hub for aircraft for the region, with the results showing it generated 7.1 per cent of the total gross domestic product for Canterbury in 2010.
Boult said he was not taking sides on the ownership issue, merely saying that the airport (CIAL) was a very important income stream for the Christchurch City Council, which owns 75 per cent of the asset.
The other 25 per cent is owned by the Government.
Chamber of Commerce chief executive Peter Townsend has said he is concerned that the council is relying too heavily on borrowing to fund quake-related repairs when it has other funding options available, including the sale of assets such as the airport.
Boult said he took the view that the Christchurch Central Development Unit's blueprint, released last year, pointed to a CBD rebuild of the right size for the city.
"I think we have to be brave, and history has a habit of showing that decisions that are sometimes seen to be a little brave at the time they're made usually turn out to be pretty good when it comes to infrastructure items like sports stadiums." Insofar as the argument that the council had to sell assets like the airport to fund the rebuild, he would be equally comfortable working under different ownership models for the transport hub.
"[But] there are a lot of things the airport brings to the community through its ownership, and one of them is a very large dividend that the airport pays to the city through Christchurch City Holdings Ltd . . ." Boult said.
"We also, as an airport company that is primarily owned by the city, have a dual responsibility, which is to get a fair return on our asset but also drive tourism into Christchurch and Canterbury . . . it may be that a different ownership model put different priorities on the company."
In recent years, dividends paid to shareholders have fallen from about $13 million in 2009 to $8.5m in 2011.
Boult said the commissioned BERL (Business and Economic Research Ltd) survey showed more employees within the wider airport campus than he expected, with about 6290 fulltime equivalents. The airport had worked on a number of 5000.
"With the new property developments we've got on the books, almost certain to come off over the next 12 months, that will probably add another 400-500 people working on the campus," Boult said.
In 2010, direct expenditure by all tourists visiting the region and using the airport was just over $531 million, with foreign tourists making up $346m of that total .
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