Auckland International Airport Ltd and the Queenstown Airport Corporation have cancelled the subscription agreement by which Auckland could increase its shareholding in Queenstown Airport.
The announcement was made in a joint statement last night.
Queenstown Airport last July created and sold a 24.99% shareholding to Auckland International Airport for $27.7 million.
Auckland Airport then controversially sought to increase its shareholding to between 30% and 35% by this year - at which time the Queenstown Lakes District Council would have received a special one-off dividend payment of $10 million.
Queenstown Lakes district Mayor Vanessa van Uden last night told the Otago Daily Times the cancellation of the shareholding agreement was an "appropriate response" even though the council would now not receive the special dividend.
"The critical thing in terms of owning a company is, at the moment, we are the majority shareholder," Ms van Uden said.
"Anything that goes over 25% changes your ability to make special decisions ... that $10 million, as I see it, was ... a payment for going over 25%.
"It wasn't anything to do with the original 24.99%."
Queenstown Chamber of Commerce chairman Alistair Porter and former mayor Warren Cooper - the latter a member of the Queenstown Community Strategic Asset Group which initiated legal action against the Auckland Airport action - last night welcomed the news.
Ms van Uden said it could be argued the council had received nothing in return for the sale of the shares to Auckland "but in terms of the community, they [Queenstown Airport] repaid $27.7 million of debt".
"In my view there is no ideal outcome but ... I think it gives us all some certainty.
"We actually know now, right at this period of time, we don't have to enter into public consultation.
"We now have a line in the sand."
Auckland Airport chief executive Simon Moutter said the cancellation of the agreement was in the "best interests" of both airports, the council and the 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 was "comfortable" with its existing airport shareholding and while it had always acknowledged it would like a higher shareholding, "as this would strengthen our winning partnership with Queenstown Airport even further", it was not the time to have that discussion, he said.
"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."
Queenstown Airport Corporation chairman Mark Taylor said the cancellation of the agreement took the pressure off meeting the June 30 deadline.
"It allows both airports to focus on securing tourism into the region."
The PricewaterhouseCoopers report into the strategic alliance is expected to be released by the council this week.
Ms van Uden did not think either Auckland International Airport Ltd or Queenstown Airport Corporation had seen the report.
However, the alliance is still subject to High Court proceedings, which have been set down for May this year.
Extraordinary meeting:
• An extraordinary Queenstown Lakes District Council meeting will be held at 10.30am on Thursday to discuss the "present status of the litigation" relating to the Queenstown Airport Corporation.
• It will be considered with public excluded, under a section of the Local Government Official Information and Meetings Act 1987, to "maintain legal professional privilege".
