Airport sale option raised
Council’s stake possibly worth about $2 billion
The prospect of Auckland Council selling its 22.4 per cent holding in Auckland International Airport has been raised in a council document to get desperately needed infrastructure funds.
Following t his month’s discussions of a Ports of Auckland sale, the council’s chief economist David Norman has now floated an airport sale possibility, along with many ideas to get the billions needed to cope with the population influx.
Mayor Phil Goff ruled out the airport share sale in his election campaigning last year. But Norman touched on it.
“In terms of strategic assets, like the council’s share of Auckland International Airport, if a change to ownership were ever to be proposed, it would require an amendment to the Long Term Plan and would therefore be subject to public consultation,” Norman’s latest Auckland Economic Quarterly publication said.
AIAL has a current market capitalisation of $8.25 billion, making it one of the most valuable companies on the NZX.
A possible indicative valuation of the council’s stake is about $2b.
Shares in the company controlling New Zealand’s major gateway closed at $6.975 yesterday. Its revenue base comes from airport operations including landing charges and passenger levies, concession revenue, terminal charges, rents and car parking. AIAL says in its NZX profile.
Norman mentioned the airport share sale as one of six measures, not recommending any: Borrow money Form public-private partnerships Charge targeted infrastructure rates I ncrease general rates to Aucklanders Sell non-strategic assets Sell strategic assets like the airport.
He said 45,000 people would arrive in Auckland in the year to June, the
Hthird consecutive year of that level of growth.
“That is equivalent to adding a Tauranga to Auckland in three years,” Norman wrote.
It is not the first time the airport sale idea has emerged.
Two years ago, independent reports by consultants Cameron Partners and EY said the council did not need to hold its airport stake or its $345 million portfolio of equities.
It should consider selling assets such as golf courses, airport shares and a rainy day investment portfolio to pay for badly needed infrastructure, said the reports commissioned by the council to look at different ways of financing the city’s future needs other than through rates.
Adrian Littlewood, AIAL chief executive, said in a Herald video this month that the past 18 months had been “amazing” for tourism generally.
The airport had seen major changes domestically and internationally.
About 11 new airlines had arrived here in the last 18 months.
Goff this month refused to be drawn on whether he plans to sell the council’s port ownership stake, saying only that he wants to address its longterm future this term.
On the election hustings last year, he said he would not sell the council’s airport stake, but left open the door to sell the port business.