Lord Mayor Calls for Transparency Over Newcastle Airport’s Financial Situation

2 November 2024

Newcastle Lord Mayor Dr Ross Kerridge has voiced serious concerns regarding reports about the financial stability of Newcastle Airport, calling for immediate transparency from the airport’s management. In a statement released today, Dr Kerridge highlighted several alarming allegations that, if true, could have significant implications for the community and the region’s economy.

Dr Kerridge referred to Newcastle Herald reports suggesting that internal documents from Newcastle Airport indicate its financial risk rating has been elevated to “extreme”. He noted claims that a $130 million loan request by the airport was declined by the Commonwealth Bank, and that the cost of the terminal expansion project has ballooned to $157 million, approximately 42% over the initial budget.

Kerridge highlighted further allegations which include the airport’s property development arm operating at a loss, unbudgeted projects requiring over $7 million, and the possibility of staff redundancies and other cost-reduction measures being considered to alleviate financial pressures.

“It’s less than eight weeks until Christmas, and workers at Newcastle Airport woke up to allegations that the board is considering job losses to alleviate the airport’s financial situation,” Dr Kerridge said. “The contrast between the reported internal documents and the airport’s public statements claiming a ‘robust’ financial position raises serious questions.”

As the airport is jointly owned by Newcastle and Port Stephens councils, Dr Kerridge said that any financial instability could directly affect residents, the ultimate owners of this vital infrastructure.

“The potential consequences of any financial instability at the airport would directly impact our residents, our community shareholders, through increased rates, reduced community services, sale of assets, or raising charges to customers at the airport,” he warned. “It may also impact negotiations with potential industries or partners wishing to join the Newcastle Airport precinct developments. This does not, and will not ever, sit comfortably with me.”

Dr Kerridge stressed the importance of transparency, asserting that the community deserves clear and accurate information about the state of the airport’s finances.

“The future of one of our region’s most crucial assets is at stake,” he said. “Our community deserves nothing less than complete transparency about the state of their airport.”

He announced plans to meet with the airport’s senior management to seek clarification on these issues. “I will be meeting with the airport’s senior management soon and expect these issues to be clarified,” Dr Kerridge stated.

His concerns align with recent media reports suggesting that Newcastle Airport is facing financial challenges due to escalating costs of the terminal expansion, unbudgeted expenditures related to defence projects, and declining passenger numbers following the withdrawal of an airline.

Previously, Newcastle Airport’s management has responded to similar concerns by asserting that the airport remains financially sound. CEO Peter Cock said that the airport adheres to best practice guidelines, with monthly financial reporting to the board being part of standard operational procedures. He refuted claims of financial distress, emphasising that the airport’s financial status remains robust with healthy working capital.

Chair Jude Munro also defended the airport’s position, disappointed over what she described as misrepresentations of the airport’s financial health and governance. She maintained that the board’s actions align with best practice standards and that they are committed to prudent financial management during a period of significant growth and investment.

Despite these assurances, the Lord Mayor’s statement highlights a gap between the airport’s public messaging and the allegations reported. The potential impact on workers, particularly the possibility of job losses so close to the holiday season, adds urgency to the need for clarity.

The airport is a critical asset for the region, not only serving as a gateway for passengers but also playing a pivotal role in economic development initiatives, including partnerships with defence and aerospace industries.

Community members and stakeholders are now looking to the upcoming meeting between Dr Kerridge and the airport’s management for answers. The outcomes of this are expected to shed light on the airport’s financial situation and the steps being taken to address any challenges.

“The future of our airport is not just a matter for the boardroom; it’s a matter for every resident of Newcastle and Port Stephens,” Dr Kerridge concluded. “We must work together to safeguard this vital asset for current and future generations.”