Airport building blitz to lift debt


Queenstown Airport’s debt is taking off to fund major infrastructure projects, including further terminal expansion.

However, community “infrastructure challenges” are a key risk to the airport’s strategic objectives, which might cap visitor demand, the corporation’s draft statement of intent says.

The draft statement will be considered by Queenstown’s council at its full meeting in Wanaka tomorrow.

Its financial forecast for the three years from 2017 shows closing debt will rise from $50.5 million to $110m.

In a statement to the Otago Daily Times, airport acting chief financial officer Martyn Dominy says bigger loans will enable the airport to undertake major projects, including runway widening and overlay in preparation for night flights, which are scheduled to begin this winter.

The airport is a major local employment hub, employing 350 people. But with night flights will come split-shifts to cater for longer operating hours, creating new job opportunities.

Dominy says other planned projects included an apron overlay, a parallel taxiway, an increase in aircraft parking stands and “further terminal expansion”.

There will also be upgrades for traffic flow management, forecourt and parking areas.

The draft statement says economic benefits from the airport are worth almost $275m a year and will grow.

Passenger numbers are expected to grow at 5.8 per cent per annum - long-range forecasts predict domestic passengers will double and international passengers almost treble by 2026.

“The need for investment and development of local infrastructure and tourism facilities to keep pace with this anticipated growth and maintain a quality visitor experience is a particular challenge which we are commit ted to working with the community to resolve,” the document says.

Challenges include pressure on the availability and affordability of visitor accommodation in peak periods, pressure and congestion on transport and roading networks, high demand on services and a lack of affordable worker accommodation at a suitable standard.

All those factors are having an impact on visitors and residents and could “eventually cap visitor demand”.

“Furthermore, efforts to profess future development opportunities, such as building a convention centre, appear to be in a holding pattern.

“In order to fulfil the growth and potential of the airport we need to develop mitigating strategies in a consultative and collaborative manner.”

The draft statement says at June 30 last year the corporation’s land, land improvements and buildings were valued at $182m.

The forecasted figures in the document show revenue will grow from $30m to $44m over three years, while the net profit after tax will increase from $10.5m to $14.8m.

Greater debt will double interest costs from $2.2m to $4.4m.

Otago Daily Times