Cancellation of agreement for Auckland Airport to increase its shareholding in Queenstown Airport

Two airports recognise pressure of June 30 deadline on Council and community as a key element in cancelling option to increase Auckland Airport’s shareholding.

Auckland Airport and Queenstown Airport announced today they had jointly agreed to cancel the Subscription Agreement by which Queenstown Airport could increase Auckland Airport’s existing shareholding in it with the Queenstown Lakes District Council’s permission.

In July last year, Auckland Airport injected almost $28 million into Queenstown Airport by subscribing for a 24.99 per cent shareholding, as part of a strategic alliance to grow tourism and travel into the Queenstown Lakes District. The transaction also gave Queenstown Airport an option to issue further shares to Auckland Airport to increase its shareholding to 30-35% at any time up to 30 June 2011.

The two airports said today’s cancellation of the Subscription Agreement was in the best interests of both airports, the District Council and the local community.

“We recognise that the prospect of an increase in Auckland Airport’s existing shareholding has been the subject of considerable debate within the community and has been a key factor in the Council’s plans for a potentially expensive process of community consultation.

“By taking the prospect of an increased shareholding through the exercise of this option off the table, we are removing an unnecessary distraction from the situation. It will also allow us to focus even more of our attention on building passenger volumes into Queenstown Airport, further strengthening the Airport’s contribution to the district economy. We believe that this is all the more important as a result of the impact of the Christchurch earthquake on the community and industry.”

Auckland Airport’s chief executive, Simon Moutter, said Auckland Airport was comfortable with its existing 24.99 per cent airport shareholding. “While we have always acknowledged that we would like a higher shareholding as this would strengthen our winning partnership with Queenstown Airport even further, we appreciate this is not the time to have that discussion. We have also given an undertaking to the Council that any future shareholding increase would be on terms, and via a process, which the Council as majority shareholder was comfortable with.”

Mark Taylor, Chairman of Queenstown Airport Corporation Limited, said, “The cancellation of the subscription agreement takes the pressure off meeting the 30 June deadline. It allows both Airports to focus on securing tourism into the region.

Our emphasis will be on welcoming the more than 90 people strong China Southern Airlines delegation arriving in Queenstown next month, as well as making sure Queenstown Airport is meeting the needs of airlines as they rebuild their route networks following the Christchurch earthquake.”

“It is imperative, with so many businesses relying on a strong winter season, that we maximise the capacity of the Airport for this winter,” said Mr Taylor.