Jetstar was surprised by the timing of the $27.7 million "strategic alliance" between Auckland and Queenstown airports last week, but the almost quarter-share deal did not affect the low-fare carrier's plans, chief executive Bruce Buchanan said yesterday.
"I think Auckland got a very good deal. I think they've done well. [Queenstown is] one of those few airports ... which is going to have very, very strong growth.
"Asset sales, I think personally, tend to underbake the value a little bit and the timing is what surprised me, not the fact they did it. I would have thought you wait two or three years, let the numbers double again and you sell it for a much bigger base.
"But they've got a lot of capital needs at the airport over the next couple of years, and I can understand they are looking down the barrel of some large debt and financing obligations."
After giving Jetstar's regional update to the Queenstown Chamber of Commerce yesterday, Mr Buchanan, of Melbourne, said he recognised the deal between the airports was "a reasonably contentious issue" in Queenstown.
"I think the growth prospects over the next few years are very, very strong and I think it's hard to get that right in terms of the valuation, when you sell a chunk of the airport off.
"I also understand the capital needs of the airport are quite pressing ... The question is, what's the best way to get that funding."
The runway end safety area, runway lighting and terminal expansion projects planned by Queenstown Airport Corporation would be big bonuses for Jetstar's newly announced transtasman flights, Mr Buchanan said.
"It's always a delicate balancing act when you get businesses at this sort of point. We're fortunate at Jetstar we have a parent [Qantas] with $3 billion in cash, so that makes it a bit easier for us when we've got growth aspirations."
Mr Buchanan gave credit to Auckland International Airport Ltd (AIAL) and said the low-fare carrier had a good relationship with the company.
However, the airline tended not to get too involved in the ownership structures of airports, he said.
Auckland Airport said yesterday it welcomed the new Jetstar services out of the resort.
The announcement was exactly the sort of "win-win linkages".
Auckland Airport wanted to develop with airlines.
