New Plymouth Airport is asking ratepayers for bailout of up to $25 million to help it recover from the economic hit of Covid-19.
New Plymouth's airport opened its new $29m terminal in March. Photo: New Plymouth District Council / Supplied
Papa Rererangi i Puketapu Ltd is owned by the New Plymouth District Council and opened its new $29 million terminal in March just when the global pandemic struck.
Chief operating officer and shareholder representative Kelvin Wright said the timing was unfortunate and the virus' effect had been devastating.
"New Plymouth Airport is an important strategic asset and a vital economic gateway to Taranaki which has been economically decimated by Covid-19.
"Almost all air travel was suspended during lockdown and at alert level 3, effectively cutting revenue at the airport to zero which is a major headache for all regional airports across New Zealand."
Wright said independent financial advisors PWC had investigated the options and recommended a major cash injection as soon as possible of between $19 million and $25 million so the airport could secure its financial future and recover to pre-Covid revenue by about 2023.
The PWC report said an airport dividend could be used to pay the bailout back, and the council had a Covid Recovery Reserve that could be used to minimise the impact on rates.
The other option explored by PWC was to return the airport to district council ownership, including operation and funding.
On Tuesday, the council will vote on a $175 million Get Us Back On Our Feet budget and they will also consider the recapitalisation of the airport.
The council has already approved additional debt funding of $1.9 million to carry the airport company through until the end of July.
It has set aside approximately $20 million to help struggling businesses and residents recover from Covid-19.