Airport's status unlikely to change in short term

Palmerston North international airport looks set to carry only domestic flights for at least another year.

Since Freedom Air wound down in March 2008, the Palmerston North City Council-owned airport has been looking to resurrect international flights to and from the city.

Airport director Rodney Wong told the council's finance and performance committee yesterday that the airport was expected to remain domestic-only for 2010/11.

"We foresee a year ... very similar to the current year."

Airport chief executive Garry Goodman said, though, it had not stopped trying to re-establish international services.

"We're on the radar of more than one company. Unfortunately we still don't have any particular numbers to announce to you."

The pair presented the airport's draft 2010/11 statement of intent and six-month to December 31, 2009, result to the committee.

Domestic passenger numbers were down 6.8 per cent in the last six months of 2009, compared with the same period in 2008, although seat capacity on the city's monopoly airline Air New Zealand fell 15.3 per cent in the same period.

Domestic visitor number figures to the region were growing faster than the national average at 3.2 per cent compared with 2.3 per cent, Mr Wong said. "Although the numbers don't look fantastic looking back, looking forward there are lots of promises."

The cost of trying to lure airlines into making international flights from the airport was not huge.

"The cost will come in sealing a deal. There's not a high cost to remaining international-capable," Mr Wong said.

The company had a net surplus after tax of $141,510 for the last half of 2009. That was 37 per cent down on the same period the previous year and 23 per cent below budget.

According to the draft statement of intent, an improved surplus of $489,000 was expected for the 2010/11 financial year.

In response to a question from Councillor Pat Kelly, Mr Goodman confirmed there were no plans to scrap the $5 departure tax, although the airport had always wanted it to be collected by airlines when tickets were purchased.

Speaking to the Manawatu Standard, Mr Goodman said the airport would this year discuss that with Air New Zealand during its five-yearly landing charges review.

"We haven't managed to convince them in the past, but that's our end goal."

During the council committee meeting, Mr Wong said the airport company's board had looked "long and hard" at whether there should be a departure tax.

Councillor Peter Wheeler asked what improvements the money collected from the tax make.

Mr Goodman replied it was mostly used to service debt on past improvements to what used to be a "tin shed".

- © Fairfax NZ News