Mayor, CEO explain their airport SOI strategy

In separate statements the QLDC Mayor and CEO have explained their position on this week's controversial plan to ask councillors to approve the Queenstown Airport Corproation's Statement of Intent - prepared pre-Covid-19.

First we publish a statement from CEO Mike Theelen - followed by a statement released to Crux earlier today from Mayor Jim Boult.

"In direct response to COVID-19, Queenstown Lakes District Council (QLDC) elected members are being asked to agree the proposed Statement of Intent (SOI) from Queenstown Airport Corporation (QAC) at this Thursday’s Council meeting.

The recommended course of action will enable the airport company to direct its attention to respond to the immediate crisis and focus on developing a modified SOI for consideration later in the year. This will enable the QAC’s future business strategy to accurately reflect the impacts of COVID-19 on the company’s operations and three-year planning horizon.

QLDC CEO Mike Thelen

Under normal circumstances, explains QLDC Chief Executive Mike Theelen, the Councillors would be asked to receive a draft SOI that would then be agreed mid-year.

“However, the Statement that has been prepared by QAC is a moment in time, written before Aotearoa New Zealand went into lockdown under alert level four. Although the SOI references COVID-19, it cannot fully reflect or anticipate what the operating impact of an extended period with no international or domestic travel means for the corporation,” Mr Theelen said.

“These are unusual times and these are pragmatic recommendations that are being put to the Councillors for consideration. There is a legislative need for the QAC Board to adopt an SOI by the end of the financial year, and while the SOI is complete the future is shifting so rapidly that this SOI will require modification in the next six months; the local government act provides for that, and these are the very circumstances where that approach is appropriate.”

“So what is being proposed to Councillors is a rational approach that meets legislative requirements and creates the space for QAC to undertake a comprehensive review of its business strategy and essentially rewrite it in a completely new environment. Our communities have debated in recent years what the boundaries of airport growth might look like; today we have no planes flying whatsoever, and while services will begin to return the future is likely to be quite different for a considerable period and the planning for that will need to be fully addressed in the modified SOI when it’s considered by its owners later this year.”

The proposal being put to Councillors is to agree the current SOI immediately and, as majority shareholder with the support of minority shareholder Auckland International Airport Ltd, support QAC’s commitment in the SOI to begin work on a modified SOI to be delivered by the end of October 2020.

Mr Theelen added that the immediate focus for the QAC was the direct effects of COVID-19 on its own staff and those who work in the airport environments.

“As well as 70 of its own employees being directly affected, there are 900 employees across 80 businesses that exist at the district’s airports. All of these are members of our community and impacted by this current crisis, and need to be the QAC’s immediate priority.”

The proposed new deadline for a modified Statement of Intent would also allow for due consideration of the MartinJenkins airport impact assessments and the QLDC draft Spatial Plan, both of which are being updated to reflect the effects of the COVID-19 pandemic.

In the meantime, QAC has confirmed it has ceased its capital investment programme other than critical works."

Mayor Jim Boult, responding to a request from Crux sent yesterday, Sunday, April 19, supplied the following statement. In particular Crux asked why the airport SOI was being voted on prior to the release of the all important Martin Jenkins airport impact report.

"Council certainly intends to ensure that the Martin Jenkins report is released, but at this stage it has not been completed and their modelling is being updated to ensure continued relevance in a post-COVID 19 environment. However, for very obvious reasons, Council attention has been on more immediate matters.

Mayor Jim Boult

As you know the "normal" timetable for adoption of the SOI would have seen this finalised in June by which time the MJ report would have been completed and released and would have informed Council’s approach to the SOI. I think most people would agree that COVID 19 has fundamentally changed the way we and the world in general operate. Frankly the airport, in particular, faces a completely changed operating model. There is no certainly about its future or for that matter, about the quantum of future air travel. As stated, the MJ report will still have relevance but at present the issues of growth, and any thoughts of airport expansion are simply off the radar. I'm surprised anyone reading the news lately would have a different view.

The Airport has clearly signalled to Council that it is in survival mode and will need the period between now and when the post lockdown environment provides at least some clarity, to plan for the future. I repeat, any thoughts about growth are off the table. In fact, I will be surprised if the issues around the pressure the district and the airport have been under from tourism growth become a reality again in the foreseeable future.

I believe that as the airport moves into its COVID 19 response and starts to plan for the  next three years, the MJ work will still be of relevance, though to what extent I cannot be sure yet. I can assure you however the Council will continue to use its findings to inform it and its relationship with its airport company going forward."