Council yet to delve into airport’s position

The state of the Queenstown Airport Corporation’s (QAC) finances has yet to be discussed by its majority owner (75.01%) the Queenstown Lakes District Council.

Cr Niki Gladding said this week "every other business" was looking at its financials "... but we haven’t had that discussion as councillors".

"The risk to the investment hasn’t been something that’s been talked about."

Mayor Jim Boult confirmed there had been no discussion by the council, but that its position was to provide the QAC "with the space to reconsider its business strategy including its financial position".

At a meeting of the council last week, Cr Gladding raised the spectre of the council losing control of the QAC because of Queenstown Airport’s lack of revenue under the Covid-19 restrictions, its potential debt levels and the impending expiry of credit limits.

Asked this week to respond to the issues raised by Cr Gladding, Mr Boult said there had been "no indication any of the scenarios" Cr Gladding had raised were "on the horizon".

"We are confident that the [QAC] board is managing the business appropriately given the current circumstances.

"As a CCTO [council controlled trading organisation] this is their role."

At the meeting, Cr Gladding quoted the Auditor-general saying local authorities needed to have an effective governance regime for managing the risk associated with CCTOs.

"So it is our job to manage our investments."

Cr Gladding said in the worst case scenario the council could be faced with bailing out the QAC by issuing more shares to raise capital or underwriting its debt.

"I just think there’s a risk there."

Mr Boult said any discussions about a bailout would be "remarkably premature".

Selling shares required the approval of the shareholders and that would involve discussions with councillors, he said.

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