QAC chairman Mark Taylor was asked to comment yesterday on questions posed by Christchurch International Airport Ltd chief executive and Lake Hayes resident Jim Boult on the surprise buy-in announcement on Thursday.
"My biggest question would be, why they didn't take it to the open market for the best deal," Mr Boult told the Otago Daily Times.
"Market pressures sometimes drive a better deal."
Mr Taylor said the board had a valuation completed and negotiated with Auckland, a value consistent with the valuation over 90 days.
"We were happy to proceed on the basis we had and then understood phase two, which is a public process, was going to start now and be governed by the Local Government Act."
When asked if QAC could have secured a better deal on the open market, Mr Taylor said "you never know", but reiterated the board felt the price was right.
In response to some Queenstown Lakes district councillors' claims the community should have been consulted before the shares were sold, Mr Taylor said if councillors were involved, they would have been obliged to follow the Local Government Act "and take the process over".
"There would have been a considerable amount of time before we had certainty of where, and with whom, we would raise significant amounts of capital."
The board's only other option was to exercise its powers under its constitution and take the opportunity.
"Queenstown Airport needs additional capital and the council is not in a position to provide additional capital, as it has other obligations," Mr Taylor said.
"Queenstown Airport needed to partner with somebody. The notion it would have been 100% owned by the council [indefinitely] was not an option, if the airport was to keep up with the growing demands of passenger traffic."
The $27.7 million injection paid off two-thirds of the airport's $37 million debt, Mr Taylor said.
The council had to decide if phase two - to sell up to 35% of airport shares to Auckland - should be taken, by consulting the community.
The council, as majority shareholder, stood to receive a $10 million upfront dividend at the end of the phase two process in 12 months, followed by annual dividends of about $2 million.
Mr Boult said previous discussions between his company and QAC had been informal and based around operational synergies, cost savings and marketing benefits - not specifically about Christchurch buying shares in Queenstown Airport.
Mr Boult said he did not have a view on whether QAC should allow Auckland to increase its shareholding up to 35%.
He said "the horse has bolted", when asked if any other party would be interested in buying QAC shares.
However, Mr Boult welcomed any move which would bring more tourists into the South Island.
"We've had a long association with Queenstown Airport and Destination Queenstown - 92% of international arrivals into the South Island come into Christchurch - and I'm sure our relationship will remain unchanged."
• The QAC board of directors are WHK chartered accountant and partner Mark Taylor (chairman), chartered accountant Murray Valentine, chartered professional engineer James Hadley, and Alison Gerry, a director of Kiwibank and Pioneer Generation, and a visiting fellow in corporate treasury risk management for Macquarie University, in Sydney. She replaced WHK chartered accountant and partner Duncan Fea on June 1. The QAC chief executive is Steve Sanderson.
