Kerikeri airport could change hands

The cash-strapped Bay of Islands Airport at Kerikeri could be taken back by the Far North District Council.

The airport's current owner and operator, council trading company Far North Holdings Ltd, has been grappling for years with the problem of raising the estimated $5 million needed for maintenance and an upgrade for bigger aircraft.

The council has already taken back assets such as its headquarters in Kaikohe and is now considering doing the same with the airport, because direct council ownership could open up new funding options.

Far North Holdings has asked the council for $245,000 a year for the next two years to part-fund critical maintenance on the taxiway and apron.

The company requested a similar sum from the Northland Regional Council to make up the $980,000 total required.

The district council has agreed to hand over its share of the money as an interim measure - but only as a loan at commercial rates. The company will also have to satisfy the council that the work is urgent, and show it has the money needed to complete the project.

Spokesman Richard Edmondson said the council would review whether the airport should remain within Far North Holdings' portfolio.

Returning it to council ownership could open up funding options not otherwise available. The council was not ruling out the idea of the Northland Regional Council having an ownership role.

Far North Holdings had earlier asked the district and regional councils to contribute to a $5 million, five-year runway maintenance and works programme aimed at improving airport facilities. The hope was that the Government would also chip in a third of the costs.

That proposal was withdrawn when it became clear a government contribution was unlikely, Mr Edmondson said.

The regional council declined to participate this year, but had left the door open for ongoing discussions on future funding options.

Kerikeri Airport is Far North Holdings' biggest asset but also its biggest funding headache.

Other ideas for raising money for an upgrade - said to be vital to allow regular flights by bigger aircraft than the 50-seater Bombardier Q300 - have included a departure tax of $5 or $10 but that has proved unpopular.

Attempts to wrest more money from Air New Zealand have also failed.

Elsewhere in the Far North, Kaitaia Airport is owned by the Crown, but leased to the Council and managed by Far North Holdings. Kaikohe Airport is owned by Far North Holdings and primarily used as a recreational airfield.