Wānaka airport: are new QLDC fees the source of debt?

Reader Commentary.

Nick Page is a retired Civil Engineer who built a house in Wanaka 10 years ago after holidaying there annually for more than 20 years. Most of his career was spent in the contracting industry, where he spent the last 20 years as an owner and director of a contracting company specialising in commercial building projects. Nick is also a member of local advocacy group Protect Wānaka.

QLDC, the mayor and the QLDC publicity machine, would have us believe that Wānaka airport is currently running at a loss and is being subsidised by QLDC’s ratepayers. However, even a cursory examination of the extremely limited publicly available financial information shows that this impression is far from accurate, and to the contrary it is Wānaka Airports users who are now being forced to subsidise QLDC through the massively escalated council charges that they have recently imposed on the airport.

Up until 2018 council’s published information shows that the total cost of running Wānaka airport was less than $500,000 per year, and that the airport was consistently profitable, with income from landing fees and lease income comfortably exceeding total costs. It was only after the QLDC/QAC lease fiasco of 2019/22 that the airport was suddenly portrayed as making significant annual losses.

Why the change?

Even though minimal changes have occurred in the operations and scale of the airport since 2018, council are now claiming that the airport runs at a significant annual loss and does not “wash its face”. QLDC provide us, its ratepayers, with scant information on the financial situation with Wānaka airport, but what is evident from the limited publicly available information is that costs charged by QLDC to the airport have escalated massively, in fact fourfold since 2018, to almost $2,000,000. This massive cost increase crushes the extra income achieved over the same period, through the steep increase in landing and lease fees QLDC have recently been imposed on airport users.

So how does council justify their 400% increase in costs? They don’t.

They won’t even make any details publicly available, despite many requests. The limited information they have released shows that since 2018 council have inflated their annual Interest and Depreciation charges to the airport by over $400,000, even though no significant capital work has been carried out over the period. They are also now charging the airport an unexplained annual $362,000 “QLDC overhead charge”, in addition to a $478,000 Management Fee.

That all adds up to council now charging Wānaka airport outrageously high overhead costs, exceeding $1,250,000 annually, and those excludes the actual airport running costs. Those overheads are now three times the total cost of running the airport in 2018! Something is badly wrong!

Under any fair and reasonable accounting treatment by council it is abundantly clear that Wānaka airport currently, and can continue to, well and truly “wash its face”, as it was acknowledged as doing prior to 2018. However, it certainly cannot, and indeed should not have to, subsidise council by more than $1M a year! Wānaka airport is a great airport for what it does: general aviation, pilot training, Warbirds, NASA balloon flights, skydiving, small scale commercial flights and so on. It fits its local community. For the last 20 years there has been pressure from outside of the Upper Clutha area for Wānaka airport to change; for it to massively grow, which will inevitably lead to the loss of many of the things it now does well – all to satisfy the demands not of the Upper Clutha but of the Queenstown establishment.

It seems that in preparation for the current airport master planning consultation process council have set out to try to persuade us, their ratepayers and residents, that the only way to justify and “save” Wānaka airport is to borrow and spend many millions, or tens of millions, to turn it into another Queenstown jet airport. The current QLDC Long Term Plan includes allowance for more than $11Million for capital expenditure at the airport, which the district can ill afford, but provides absolutely no details of what work that might cover. Council spending at least $11M on the airport, with no guarantee of any additional income, looks to have all the hallmarks of another spend and hope development that we as ratepayers certainly cannot afford and do not need!

Council’s continuation of its 20+ year efforts of trying to force a mega expansionary jet airport scenario on the Upper Clutha community, in part by now presenting the airport as a loss-making enterprise due to it imposing inflated council overhead costs, is wrong, unconscionable and unfair to the community.

If the council were to leave the airport alone, abandon its mega growth aspirations and allow the airport to be run efficiently and grow organically as a valued local general aviation airport, without burdening it with massive overheads, there seems no reason why the airport should not be able to operate in a financially sustainable manner, as it did historically. It could then continue to profitably provide jobs and services, including in time potentially expanded turboprop commercial flights should the local community decide.

In stark contrast to much of the critical infrastructure work urgently required of QLDC, any major capital expenditure on Wānaka Airport would be entirely discretionary spending for the council. As shown above, an efficiently run local airport can continue its current role as a general aviation airport with modest commercial aviation businesses based there also, operating in a cash flow positive manner without requiring significant capital input from council.

It is vital that the Airport Master Planning process currently underway addresses these issues. Any proposal for the airport’s future needs to be supported by an honest, detailed and transparent set of past and current accounts and thorough, transparent costings and in-depth benefit cost analyses for any future options.

Wānaka Airport cannot and should not be required to subsidise QLDC’s general operations. Its future must be determined through honest and informed public consultation, not misinformed statements aimed at creating the incorrect impression that the airport cannot operate profitably in its current form.