Council narrows options for Merimbula airport

Council narrows options for Merimbula airport

The Bega Valley Shire Council has opted for a conservative approach to the issue of the future operational management of Merimbula airport.

The current lease to Merimbula Airport Agencies ends in June this year.

Council, at its December 18 meeting, has ruled out the option of council taking on the direct management of the airport and has abandoned any hope of private ownership. This would have seen council selling the airport and relinquishing ownership to a third party. Financial information provided in a report authored by council’s group manager Infrastructure Waste& Water Wayne Sartori, underpins council’s decision.

The current annual operating costs of the airport are about $580,000. Capital costs, that includes infrastructure renewals and upgrades based on medium growth of up to 150,000 passengers by 2022, is about $30 million. Income from airport operational activities earns about $590,000 from passenger head tax and approximately about $23,000 pa from terminal leasing (café and hire cars) and hangar leasing.

Mr Sartori said it was important to note that income from supplementary businesses currently being undertaken by the existing lease operator are not included, “as they are not, nor could they be, council derived income. “To be clear revenues from passenger/baggage handling, security card production and aircraft refuelling are not available to council.

”What is clear is that given the rate of return, it is very unlikely that a third party would make any large capital commitment, at least in the medium term”  

Council has narrowed the choice to two options – options 2 and 3. It can either opt for a contract manage scenario (option 2) or enter a lease agreement (option 3) aspects of which are similar to the current operation. These two options will be the subject of a public consultation meeting to be held at Club Sapphire Merimbula on Wednesday, January 15, commencing at 5pm.

The contract manage option would see council engaging a qualified and experienced company to operate the airport. This option is essentially a fee for service. Council transfers some of its responsibilities but ultimate responsibility and risk rests with council.

The lease agreement option would see council leasing the airport to a qualified and experienced company to operate the airport. It would enable council to transfer some operational and financial risks. It would include variations which could include the lease of the airport operations (runway, terminal and associated areas) and the airport business lands as separate parcels.)