July 8 (Bloomberg) -- Auckland International Airport Ltd., New Zealand’s largest, will invest NZ$27.7 million ($19 million) buying a 25 percent stake in Queenstown Airport, which services the alpine resort town on the nation’s South Island.
Auckland will subscribe to new shares and has an option to raise its stake to as high as 35 percent as part of a strategic alliance, it said in a statement sent to the stock exchange. Queenstown Airport has the nation’s fourth-largest number of international visitors.
Auckland, the arrival point for more than 70 percent of New Zealand’s visitors, is investing in new terminals and alliances to help increase traffic. In January, it bought a 25 percent stake in two airports in Australia’s Queensland state.
“We can accelerate growth in international passenger volumes by forming deeper partnerships with selected and like-minded airports that share our growth focus on particular airlines and travel markets,” said Chief Executive Officer Simon Moutter.
The two companies have been cooperating informally for the past year, during which time there has been a 36 percent increase in passengers between the two airports, he said. A formal alliance is expected to boost traffic further, with an extra 176,000 passenger movements within five years.
Queenstown had 811,460 passenger movements in the year ended June 30, according to today’s statement.
Funds from the share sale will allow funding of capital works and strengthen the balance sheet, allowing dividend payments. The airport’s majority shareholder is the Queenstown Lakes District Council. The two companies will also work together on retail activities, property development and aeronautical operations, they said.
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