3rd Level New Zealand: Masterton

01 February 2025

Masterton - Will it be a Goer?

With a $17 million investment in Masterton’s airport, the council says it may attract interest from commercial airlines but they would need to fly on their own two wings. Hood Aerodrome is undergoing a major upgrade to allow Civil Aviation Authority certification and use by a regional air service, with completion expected by late this year. Masterton District Council chief executive Kym Fell said the asset lost close to $500,000 annually because the airport was not optimised to its full potential. In such a context, he believed ratepayers would not be inclined to subsidise an air service. “There would be no appetite, I would suggest, for us to underwrite an airline or to contribute towards underwriting a number of [passenger] seats. “Any new airline that would look to come in here would need to do their own due diligence and it would need to stack up for them. “That’s really a risk that the airline would need to take.” However, once the aerodrome was certified, the council could enter into commercial negotiations with an airline and increase the opportunity to generate incremental revenue, he said. Commercial considerations could underpin the deal, such as offering incentives to support passenger services. That might include the likes of a reduced landing fee component or a peppercorn rental for the terminal, Fell said. “From an economic development [and] destination perspective, we would contribute towards some marketing. A big focus is to reduce the reliance on ratepayer funding because it’s a great asset for our region and not just Masterton.” Murray Cole, a seasoned expert in global aviation and former airport and regional airline owner, recommended that the district’s ratepayer money should not be used to subsidise a commercial airline. “The whole idea of the council providing a significant ratepayers’ subsidy to an airline – it’s uneconomic for both parties and unfair on ratepayers.” Cole said he knew “the tricks and formulas” commercial operators applied when they went to councils to get an economic underwriter. Other smaller regional airports that invested heavily in infrastructure upgrades had suffered financially and needed significant aid to support them, he said. “They’ve all done the same thing as Masterton is now talking about.” In 2023, documents obtained by the Taxpayers’ Union under the Local Government Official Information and Meetings Act revealed that several councils paid out millions of ratepayer dollars to subsidise a regional airline. Group spokesperson Alex Murphy said ratepayers in the Kāpiti Coast, Whakatāne and Whanganui districts paid more than $2m in corporate “welfare” to maintain regular flight services to Auckland using Air Chathams. If these routes were financially viable and demand was plentiful, airlines would pick them up without the need for council subsidies, Murphy said at the time. Masterton mayor Gary Caffell said the council was willing to talk to any airline company interested in coming to Masterton. “We’re not into subsidising and costing our ratepayers any extra money, but we’re certainly looking to turn Hood from a non-profit into making money,” he said. A business survey conducted last year by Destination Wairarapa to gauge public interest in the return of passenger air travel to Wairarapa received overwhelming support from businesses and residents. A total of 677 residents responded to the survey, 91% of whom said they were likely to use an air service from Masterton’s Hood Aerodrome.