Singapore Airlines has support from several local agencies
Singapore Airlines says it has support from a range of local bodies and agencies on top of its deal with Wellington City.
The airline said it had received marketing support from Wellington Airport, Canberra Airport and local authorities and tourism bodies in both cities for the service that links Wellington, Canberra and Singapore.
Wellington council reportedly contributes up to $800,000 a year.
An airline spokesman said he couldn’t comment on the commercial arrangements.
”We can confirm that the marketing support is provided in addition to the substantial investment Singapore Airlines is making to establish, promote and grow the new service for both inbound and outbound markets,” a Singapore Airlines spokesman said.
Deals with local authorities and airports are common for airlines starting new routes.
Typically the money is spent on marketing and advertising at both ends of the route and organisations use the leverage from an airline brand to boost local regions
Auckland Tourism, Events & Economic Development often works with the likes of Tourism New Zealand and Auckland Airport to provide marketing and sales support to new and emerging air links but does not provide financial contributions to establish new connections.
Auckland Airport says it works closely with international airlines that start services to the city and provides financial and non-financial services.
Wellington Council chief executive says he would welcome outside scrutiny of a deal to pay Singapore Airlines to fly to the city.
The Auditor-General has been asked by a member of the public to investigate, a spokesman for the office confirmed. It is yet to decide whether to do so.
The request relates to a deal in which Wellington Council agreed to pay Singapore Airlines to start a Wellington to Canberra to Singapore flight.
The money came from a $1.8 million fund for marketing Wellington, and the spending was signed off by council chief executive Kevin Lavery.
Councillors did not sign-off on the spending – something Lavery said was needed because of a history of leaks.
“Once you expose commercial details at a committee level it gets into the public domain and you lose your competitive edge,” Lavery told Radio New Zealand, adding that any suggestion there was insufficient paperwork on the deal was “nonsense”.
“I think the current debacle in the press illustrates perfectly why it’s not appropriate to have it in the political domain. It gets politicised, and I think a lot of organisations wouldn’t touch us with a barge pole if that happened.”
The Dominion Post has reported the 10-year subsidy is worth up to $800,000 a year, but Lavery would not reveal the agreement, citing commercial sensitivity.
“We don’t want to lose out to competitor cities that would love to have the deal we have with Singapore Airlines,” he told Radio New Zealand.
Wellington Airport calculated the new route could be worth nearly $100 million a year to the city, with thousands of visitors creating jobs.
Lavery said the council agreed with that calculation and did not feel the need for an independent report on potential benefits.
The fund from which the money came was set up in 2012, and councillors agreed to the process for how it could be spent.
“We would welcome any discussion with them [the Auditor-General]. We don’t think we’ve got anything to hide or anything to be concerned about.”