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Nelson Airport Company chairman Ian Kearney said a departure tax was an issue that was raised occasionally. It was one option being examined, but there had been no decision on it.

Mr Kearney said the company had commissioned a consultant to work on an asset management report, which looked at all the airport's assets and what was required in terms of major upgrades. It was now looking at how these would be funded.

He said there were points for and against a departure tax. Its introduction would have regional implications, and could affect tourists' views of Nelson.

Palmerston North airport introduced a tax several years ago to fund special upgrade works. It costs departing passengers on domestic airlines $3 to leave Palmerston North, and $25 if they are going to Australia.

Mr Kearney said a tax would be a form of fixed revenue for the airport, but if it was introduced it could change other charging structures, such as the way aircraft landing fees were dealt with. Landing fees were a major income stream for the airport.

The airport had other revenue sources from lessees, including the site of the Origin Pacific Airways terminal, and airlines .

Airport manager Paul Rosanowski said today Nelson Airport was the fourth busiest in the country, based on scheduled flight movements.

An estimated half a million people passed through the airport each year, he said. It handled 62,511 aircraft movements last year-- a 37 percent increase since 1988, according to the Nelson tower movement analysis.

Mr Kearney declined to say how much development may cost until all the details had been examined further, but said the company was due to produce its statement of intent next month.

''By then we will have come to a number of conclusions.''

Mr Rosanowski said in March that reducing congestion alongside the terminal's road frontage was a major priority. Making the terminal look ''smarter'' was also being given some urgency.

Plans included better baggage claim facilities and changes to the roading and parking arrangements at the terminal entrance.

This follows completion of a recent carpark project, which resulted in the addition of 85 spaces to the long-term carpark area. The cost to park a car there rose on May 1 from $2 to $5.

Mr Kearney said the consultant working on the airport upgrade project had also pointed out the need for a major resurfacing of the main runway in two to three years, which could cost nearly $2 million.

An extension to the aircraft parking area and re-sealing of the taxiways was also needed.