The alliance between Queenstown and Auckland airports, in which Queenstown created and sold a 24.99% new shareholding to Auckland for $27.7 million, was announced in July last year.
On August 17, 2010 the Queenstown Community Strategic Asset Group and Air New Zealand filed separate, but related, claims in the High Court at Invercargill, seeking an injunction and judicial review.
The judicial review was scheduled to begin on May 16 this year, but the parties withdrew their legal action on May 13, with Air New Zealand deputy chief executive Norm Thompson saying it had "become clear" it would be a "long and expensive battle which could cost several million dollars for all involved, including the Queenstown community".
The elected members decided during the annual plan process to use the dividend for debt repayment.
In a statement yesterday, Queenstown Airport interim chairman Murray Valentine attributed the company's ability to pay the first dividend in part to "last year's restructuring of the balance sheet by raising $27.7 million of new capital".
The airport had a total dividend payment of $3.28 million - $821,000 of which would go to Auckland airport, in line with its 24.99% shareholding.
Other key drivers in the strong financial performance were record passenger numbers, an increase in aircraft movements and strong revenues from commercial activities, including retail concessions and car parking.
Operating revenue increased by 17% to $15.6 million and the 2011 earnings before interest, tax, depreciation and amortisation were $9.9 million - a 31% increase over 2010's $7.54 million.
This year's net profit after tax (Npat) of $4.58 million represented a lift of 22.1% over normalised Npat of $3.75 million in 2010.
Passenger numbers also increased, with a record 924,248 people passing through the airport, a 14% increase on last year.
International passengers increased by 50% at 161,089, while domestic passengers rose 8.5% to 767,159, Mr Valentine said.
QAC chief executive Steve Sanderson said the continued growth of the airport had been boosted by increased flight frequency on "traditional routes", the introduction of a new route by Jetstar to the Gold Coast, larger aircraft and more people choosing to visit Queenstown by air.
"We just fell short of reaching our goal of one million passengers.
"The impact of the Chilean volcanic ash cloud in May and June, which saw up to 50% of certain weekly international flights cancelled, shows the need for the business to be fit financially and operationally.
"Overall, though, [it was] a really good performance, with the seat capacity in and out of Queenstown growing by 14% to 1.176 million over the last year."
Mr Sanderson said Queenstown Airport had also consolidated its position as the second-largest base of New Zealand rental car operations.
Commercial transport and car parking revenue also rose 16%.
The growth of the airport had also accelerated the master plan and required the completion of several major strategic projects in the past year.
