Friday, June 19, 2009

Local government cargo cult - Hawke's Bay Airport

This from Napier City Council and Hastings District Council, with central government collaboration - they hope.

Hawke's Bay Airport is a joint venture between central government and these two councils, with central government holding 50% of the airport, and the two councils owning the rest. (Napier 26%, Hastings 24%) However, it would be fair to say central government is not driven by wild ideas of expanding the airport for regional development.

So the plan to spend NZ$9 million extending the runway, for airlines that don't fly there yet, and planes nobody wants to fly there, is just local government wasting ratepayers' money for the sake of pride and regional kudos. Air New Zealand generates most of the traffic, and is perfectly happy flying ATR72 and Q300 turboprops, as was Origin Pacific when it existed providing competition on the routes. It does not wish to fly jets. Neither Jetstar nor Pacific Blue have declared serious interest in flying there, and the idea of international flights is ludicrous.

However, when you work in local government you can spend ratepayers' money on a cargo cult. In the midst of the most serious recession in the airline sector in modern history, Napier and Hastings councils think it is time to expand. It isn't a commercially sensible decision, the airport is seeking to borrow money to pay for a runway extension that nobody is prepared to pay to use.

It is a cargo cult, "build it and they will come". It didn't work for Invercargill airport, which wasted money on international facilities. There isn't enough traffic to Hawke's Bay Airport to sustain a competitor on the routes Air NZ flies (which is does show with rather high yields), so why the hell will bigger planes fly there?

The airport should be privatised, the government should flog off its ownership so that a private owner can put in some directors with some business acumen, and the councils should be required to sell off their shares. Ratepayers can then get a windfall they can use to invest on what THEY want, and Hawke's Bay Airport can then be operated on a commercially sound basis, it might start by trying to attract more airlines, rather than worship the rather childish idea that jet airliners can be the only way the airport can grow.

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