Skyline budgets $7m for Queenstown slip damage

Skyline expects to spend $7 million in response to slips during heavy rain last year linked to its gondola operation in Queenstown.

The Queenstown Lakes District Council is continuing to investigate Skyline's role in the September weather event, which prompted the declaration of a local state of emergency after debris swept down from Ben Lomond Reserve, into the town, and forcing the evacuation of some properties.

In its annual report released this week, Skyline says the cost of remediation works in relation to that event totalled $2.5 million in the year ending March 31, 2024, with a further $4.5 million expected in the year ahead.

"In September 2023, a weather event caused two slips on Bobs Peak where Skyline Enterprises’ Queenstown Gondola operation is located," it says in the report.

"Skyline Enterprises has led the remediation efforts for the Queenstown Cemetery and Reavers Lane catchment, whilst any potential liability or regulatory infringement for either slip occurrence continues to be investigated."

While the report confirms the company has lodged insurance claims in respect of these costs, it acknowledges whether or not there will be any resulting payout remains an unknown for now.

In September, mud, logs and other debris flowed down Bob's Peak under the gondola, inundating the Queenstown Cemetery, which was closed for several months as a result.

A few blocks away, a separate debris flow that started at a construction site at the top of the gondola covered areas around Reavers Lane, damaging private property and forcing residents and businesses to evacuate overnight.

An investigation by Crux in the weeks following the storm revealed Skyline to be the source of the Reavers Lane flow, forcing the company to issue an apology and district mayor Glyn Lewers to demand answers.

In July, a spokesperson for the Queenstown Lakes District Council confirmed the council's investigation into Skyline is expected to be complete by the end of September.

Skyline is reporting profit before tax of $28.7 million in its annual report, down from $71.38 million the year before. due mainly to impairments.

However revenue for the year rose to $211 million from $175.6 million, with total gondola passengers reaching 1.3 million, up from 1.1 million.

The report notes a "fantastic 2024 result" in Queenstown, where the introduction of new 10-seat Doppelmayr gondolas has more than tripled capacity, allowing up to 3,000 people per hour to get to and from the summit, a substantial increase from its predecessor.

Reconstruction of the top and bottom terminals was also completed during the year to allow for the new gondolas, as was a new 400-space car park at the gondola's base, it says.

Meanwhile, housing staff remains a "big challenge" for Skyline in Queenstown, with the report saying the company upped its staff housing portfolio with the Coronet View Apartment building, adding an extra 45 beds.

"The additional accommodation assists us in attracting staff during busy seasonal peaks," it says.