What can we expect of our councillors’ Statement of Expectations for QAC?
WLW letter to mayor and councillors, 14 December 2021
Dear Mayor and Councillors,
I had an interesting meeting with new Queenstown Airport Corporation CEO Glen Sowry late last week, during which he reaffirmed his earlier media comment that QAC would not seek expansion of the air noise boundary (ANB) at Queenstown Airport in the 10-year strategic plan to be presented to Council next year.
He acknowledged that to do so would be both unwise and unnecessary in the face of noise reduction technology and bigger planes, reduced passenger demand in the uncertain wake of Covid and community feedback to previous ANB extension proposals.
Mr Sowry also reversed the previous QAC policy of ignoring the huge advances of the A321 neos (admitted by QAC only after I put in a LGOIMA request earlier this year) and committed to measuring the on-the-ground noise reduction thus gained. He said Air New Zealand has already ordered 12 of these quieter and larger planes, for use on domestic routes and particularly to/from Queenstown.
He said that although his crystal ball was “rather foggy,” it would be some time before passenger demand reverted to 2019 levels and that the board was fully behind this strategic direction change.
So, we very much look forward to this QAC commitment being reflected in QLDC’s statement of expectations which, I’m thinking, should be being prepared about now to trigger the months-long SOE/SOI process.
Further, we very much hope that councillors and the executive leadership team will engage fully both with the SOE/SOI process and a meaningful conversation with our community about the way forward in the wake of Covid. There has been much talk of a reset, but little visibility thereof. And little two-way communication between the community and our council representatives.
Particularly, it would be refreshing to know that councillors have had a thorough discussion of strategic objectives you want QAC to achieve through the SOI to promote our economic, environment, social and cultural well-being. This is your role under the LGA, and it should be written into the SOE and the SOI as the basic paradigm QAC operates under. It is well within your legal mandate to include operating within the existing ANB as one such objective.
The role of your SOE should be for councillors to set strategic purpose and direction for QAC and to direct QAC as to the nature and scope of its activities. And these should be decided by discussion of full council, not by QAC, the steering group or council’s executive leadership team.
Remember, QAC’s principal objective under the Local Government Act is simply “to achieve the objectives of its shareholders, both commercial and non-commercial, as specified in the statement of intent”. What is written into the SOI is what QAC is compelled to do.
Last year’s SOE claimed that QAC “is required to have a commitment to retaining and growing long-term shareholder value”. This is not true – there is no requirement under any law for QAC to make a profit, meet international airline demand or grow shareholder value. The effect of including this false claim in the SOE is to reduce council’s strategic control over QAC, by providing an “out clause” for other purposes under the catch-all of retaining and growing shareholder value.
Beyond any commercial objectives set for it by Council under the SOI, QAC’s only financial legal requirements are to “conduct its affairs in accordance with sound business practice” and to operate or manage the airport “as a commercial undertaking”.
Many thanks for the work you do on our behalf. And all the best for the festive season ahead – I hope you all get a good break and that Covid’s community spread does not hit our district too hard.
Ngā mihi nui
Cath Gilmour, We Love Wakatipu Inc chair