Many small businesses would feel the hit when New Zealand Airline Academy (NZAA) wrapped up operations at Oamaru Airport later this year, LJ Hooker Oamaru principal and property consultant Stephen Robertson told the Otago Daily Times yesterday.
‘‘It is a huge loss to our economy.’’
The ‘‘collateral damage going forward is very sad.’’
Losing the flight school could mean losing upwards of $10m a year, with millions lost on rent, food and shopping alone, alongside job losses and rent loss at the airport.
‘‘It is a great business that has pumped millions of dollars into our local economy.
‘‘Many many smaller businesses will be negatively affected in our North Otago market because of it.’’
The decision by NZAA not to renew its lease affects 52 staff and was announced this week after a failure to reach an agreement with the Waitaki District Council.
Yesterday, a contractor based at Taieri Airfield near Dunedin wrote to Waitaki councillors and the local MP to say the impact of the academy’s North Otago exit would ‘‘extend well beyond [Oamaru] Airport itself’’.
He warned NZAA was ‘‘not simply another tenant’’.
Once organisations ‘‘of this scale’’ relocated, it was ‘‘often extremely difficult — if not impossible — to attract equivalent activity back into a regional airport’’.
Supercraft Aircraft Support owner Tyler Bouman, who does maintenance work across the South, including for NZAA, told councillors the loss of more than 200 students from a community the size of Oamaru would be the equivalent of losing a ‘‘major tertiary operation or medium-sized employer’’.
He too estimated the flight school’s students would bring millions into the local economy annually in living and spending costs alone, using ‘‘conservative assumptions’’, and the broader regional economic impact could exceed $10m — and could be double that.
NZAA co-director and head of training Celroy Mascarenhas told the ODT the flight school was worth about $20m to the local economy, based on national comparisons and student numbers at the school, which had higher tuition fees and costs.
Every item that ‘‘could be bought locally’’ was — ‘‘even if the same product is available cheaper elsewhere’’.
The flight school bought company vehicles through the North Otago Motor Group, fuel from McKeown Group and other local goods ranging from poultry to engineering supplies and cleaning products.
He said this week it had been a ‘‘tough decision’’, both personally and professionally, to exit Oamaru by the end of the year but the council’s ‘‘charges are no longer commercially viable’’.
The council rejected the flight school’s claim in a media statement issued yesterday afternoon, saying the flight school enjoyed a 25% discount.
The flight school had made it clear ‘‘from the outset of negotiations’’ it would leave if charges were not lowered from the level set in 2022.
‘‘The 2022 charging structure offered an effective 40% discount on standard charges.
‘‘In that time [NZAA] have increased their movements at the airport five times from 10,408 to 50,963 per year.
‘‘Far from being commercially unviable, council had its proposal peer reviewed, which demonstrated the proposal was competitive for airports of similar size and facilities.’’
The council was not given an opportunity to re-negotiate NZAA’s current lease, it said.
Waitaki District Mayor Mel Tavendale said it was a ‘‘shame’’ an agreement could not be reached.
There was a ‘‘question of whether ratepayers should be subsidising a business’’, saying they had had to invest in a number of areas at the airport.
The council had to find the balance between the cost to ratepayers and holding on to a business, which was a ‘‘fine line’’.
It had been ‘‘fantastic’’ to have NZAA in Waitaki, describing them as a ‘‘really valued’’ flight school, she said.
Cr Jim Hopkins said he would be trying to persuade NZAA to ‘‘retain a presence’’ in North Otago.
It was ‘‘really, really unfortunate’’ that ‘‘right at the time that the country negotiates a free trade deal with India, we appear to have failed to negotiate effectively a satisfactory deal or arrangements with what I think at the moment is the most successful flight training school in the country’’.
NZAA co-director Jonathan Manuel was one of 30 invited from New Zealand companies to the signing of the ‘‘once in a generation’’ trade deal this year between the country and India in New Delhi.
Waitaki MP Miles Anderson said he was ‘‘incredibly shocked and disappointed’’ that NZAA was leaving Oamaru.
It would be a stressful time for the staff and students of the flight school and all the associated people and businesses throughout the region.
‘‘I have been talking with NZAA along with a number of Waitaki councillors and Mayor Tavendale, and I will continue to work with both parties to see if a solution can be found so NZAA can continue operating here in North Otago.
‘‘I’ll be doing my utmost to ensure every possible remedy to this situation is considered.’’ — Additional reporting Jules Chin
