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Warning to councils: it takes 18 months to sell an airport

SUPPORT AIRPORT: To get direct and cheap flights, we must use the existing service to show demand exists.
SUPPORT AIRPORT: To get direct and cheap flights, we must use the existing service to show demand exists. File

LOCAL councils hoping to raise cash by selling off their struggling airports have at least 18 months of hard work ahead to get them ready for the private market.

After Port Hedland sold its airport for $205 million recently, many other regional councils considered doing the same to fund upgrades and maintenance.

But Norton Rose Fulbright partner Tom Young says councils face between 18 months and two years of due diligence work to get airports "privatisation ready".

The lawyer, the head of the firm's aviation group, says it is a long process and councils need to get started now if they are to capitalise on a potential "wave" of regional airport sales.

"It's not a decision to be taken lightly and there are state procurement regul-ations, legal due diligence and economic research they have to do before even considering going to the market," Mr Young said.

He said there were super-annuation and infrastructure funds interested in buying regional airports, particularly those with an attractive future in potential tourism growth through the rising Chinese middle class.

Apart from getting an airport "privatisation ready", local councils, particularly in Queensland, could face big political challenges in getting people to support sell-offs, Mr Young said.

Topics:  local council



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