Mr Prebble sticks to plans for large airports

Press, 7 May 1987, Page 25

Mr Prebble sticks to plans for large airports

PA Wellington The Minister of Transport, Mr Prebble, is sticking to his plan to turn big airports into companies, in spite of difficulties convincing city council owners, and suggestions that there may be better ways of swinging a profit. Airports that become companies could pay their way with revenue from landing charges, and return dividends to the owners as well as being taxed. That would end taxpayer subsidy of the airlines, and allow airport development decisions to be made directly by the company instead of through the council-gov-ernment route, the “Dominion’s” aviation reporter says. The system would be expensive for airlines and the public, and cuts across the highly successful system used by 95 per cent

of airports in the United States. The handling of airports was outlined last month by the director of DallasFort Worth Airport, Mr Oris Dunham, who was in New Zealand meeting executives of Air New Zealand, which begins flights there on October 25. With 40 million passengers a year, Dallas-Fort Worth is the fourth largest airport in the United States. Mr Dunham has previously run the third largest — Los Angeles International — and one of the best airports in the United States Seattle-Ta-coma. While in Auckland, he said that the way to make airports pay was not to bleed the airlines — his airport charges $l6OO for a Boeing 747 landing compared with Auckland’s $7OOO — and to make up the difference by charging heavily for car-hire

companies, car-parking and other concessions. The airports also sell debentures, or bonds, which are tax-free to investors and provide Mr Dunham’s airport with the bank balance to forge ahead with a $1.6 billion terminal. One of America’s biggest airlines, American, will pick up most of the construction cost. Mr Prebble said that Mr Dunham’s comments were neither helpful nor relevant. “He did not say he has any taxpayer contribution, and then he says they have tax-free government bonds. As a Finance Minister, I would be against that,” he said. , By not taxing income from those bonds, the state and city governments were giving the airports a massive subsidy. “The airlines are bene-

fiting from it. How do the taxpayers in the United States put up with that? I strongly disagree with him,” Mr Prebble said. There was nothing sensational about the bonds — they were popular because they were tax-free. It meant the airports never attempted to recover costs from users who benefited the most — the airlines. “Any mug can run an airport that way,” Mr Prebble said. It was clear, however, that concession holders were not being charged correctly, and he agreed with Mr Dunham that it was possible to get more out of them, and to get airlines to pay for facilities. Mr Prebble said local authorities had been reluctant to press airlines, but he showed that both Air New Zealand and Ansett New Zealand were

prepared to pay heavily to upgrade their facilities. The chairman of the Wellington Airport Authority and the Airport Authorities Organisation, Cr Helene Ritchie, supported the. American view. Forcing airlines to pay more simply pushed up fares and denied air travel to more and more people. “I am pleased the Government has not made airport companies mandatory, because they will make costs increase — that is the bottom line in any transport operation,” she said. “We have to look at planes as we have looked at trains in the past. I am concerned at the lack of access to fly to an enormous proportion of people because it is too expensive.”