Wellington considers airport share sale

Friday 9th August 2002

Wellington City Council said yesterday it "may" put its one-third stake in Wellington Airport, the country's third largest, on the market as a result of a strategic review of its assets.

Utilities investor Infratil, which owns the remaining 66%, said it would consider buying the shares at the right price if they were offered.

The council is watching the impending sale of Auckland City Council's sale of a 25.7% stake in Auckland International Airport (AIA).

Also of interest is the Commerce Commission's report, released this week, which found AIA was overcharging its customers. The commission recommended price controls on the airport's airfield activities.

This prompted Air New Zealand to demand a renegotiation of its AIA landing fees and a limit to impending fee rises at Wellington. The airline agreed last month to an interim 10% fee increase.

The commission's report said Wellington was also overcharging its customers but not to an extent that warranted price controls.

AIA's shares fell from $4.16 to $3.97 after the report's release but have since recovered.

The airport said it was disappointed with the report's conclusions and disputed the methodology for valuing its assets.

It said using historical cost valuation, rather than its preferred ODRC (optimised depreciated replacement cost) method, could have serious consequences for other infrastructure companies.

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