Auckland International Airport may become a hub for Emirates Airline

Wednesday, July 25, 2007

Dubai Aerospace Enterprise (DAE) of Dubai, United Arab Emirates has entered a controversial bid for New Zealand's busiest airport, the Auckland International. Merger documents have revealed that DAE would use "reasonable endeavours" to create new routes and services from Auckland for Emirates Airline.

DAE's plan is to takeover 60% of the publicly-traded airport for NZ$2.6 billion (approx. US$2.1 billion).

The chair of DAE, Sheikh Ahmed bin Saeed Al Maktoum, also chairs Emirates, which flies four times daily into Auckland. DAE does not have a shareholding in the Dubai-based airline. Emirates has said its long term plan for the airport is to establish it as a secondary hub, with flights to the west coast of the United States, or Central America and South America. Another possibility being looked into is round-the-world flights through Dubai, South Africa and Auckland. Auckland has been chosen as DAE's hub of the region due to Australian laws preventing foreign control of major airports.

DAE was set up last year by the government of the United Arab Emirates in Dubai, with funds of US$15 billion (approx. NZ$19 billion). One of the entity's goals is to build up a global portfolio of airports, particularly in emerging markets.

DAE is not the only party interested in the airport. Canada Pension Plan (CPP) is among the potential buyers completing due diligence. CPP is said to be close to submitting a bid.