AIAL: Access Denied!
Posted April 11, 2008on:
The government has blocked the sale of 40% of Auckland International Airport (AIAL) to the Canada Pension plan as it does not pass the test of “benefiting New Zealand”.
it’s a good thing those money hungry Canadians aren’t going to bleed the economy dry by taking control of a “strategic” asset.
On a serious note, I still don’t see what the issue is. We’ve discussed this previously here and I don’t feel the need to repeat the arguments we made. It’s not like they can take they airport and move it somewhere else. If they run the airport down like everyone is worried about then travelers can bypass New Zealand and go to Australia. If this happens the airport loses money so why would they do it? People will point to the railways and the our phone infrastructure as examples of strategic assets that were run down and use this as an argument that the same thing will happen to AIAL. They key thing that people ignore here is that back in the day there weren’t many close substitutes for the railway and phone communications. Therefore a firm could profitably cut expenditure and reduce quality since there weren’t many credible substitutes (i.e they wouldn’t lose customers).
Ultimately I can’t help but feel this is the political decision of a government that is scared of being associated with “asset sales” coming into an election year, rather than a decision that has been based on any sound economic reasoning.
It’s been a while since I’ve posted,have you missed my sarcasm?