Wellington's main risk is from reduced airline services and competition.
In recent years AirNZ (the Airport's main carrier) has twice endeavoured to combine its operations with Qantas (the second largest carrier). These were stopped by the NZ Commerce Commission (confirmed by the High Court) and the Australian Competition and Consumer Commission.
Four material airline users of Wellington have also withdrawn over the last decade.
A second material commercial risk is in respect of ill structured regulation. While Government expressly rejected airport regulation in 2002, it has now initiated the imposition of new economic regulations from 2012. Wellington Airport has managed to ensure it does not warrant economic regulation, however adverse outcomes in this regard can not be ruled out, especially given the political interest.
Infratil usually has four appointees to Wellington Airport's Board and the City Council two.
At present Infratil's appointees are: Chairman, Tim Brown (Morrison & Co), Alison Gerry (infratil director appointed 2 February 2017), Jason Boyes (Morrison & Co) and Phil Walker (Morrison & Co).
The Council appointees are Andy Foster (appointed October 2016) and Keith Sutton (appointed 1 January 2010).
Diversification is not one of Infratil's goals. Infratil aims to deliver on its absolute return target of 20% per annum after tax on a long term basis.
Infratil's return goals can only be achieved in companies which can invest in their own activities. While cash generation is desirable, it as a means to an end with the goal being value growth through earning growth over the long-term.
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