Wellington City Council has voted in favour of selling its airport shares to go towards an investment fund for a major disaster.
This makes Wellington Airport the first major airport in the country to be fully privately owned.
Mayor Tory Whanau said it has never been her preference, nor Labour or the Green's preference, to sell off such a large asset.
"We had to put political alliances aside and decided what is best for the city."
The minority stake, around 34%, is worth at least $278 million.
Council assets are currently so under-insured that a one in 1000-year earthquake event, such as a 7.7 magnitude earthquake in the Wellington or Wairarapa area, could see the council falling short of rebuild costs by more than $2.6b.
Funds from the sale of the airport shares could be used for a perpetual investment fund which could generate up to $6.4b over 50 years.
"We are essentially self-insuring, in an earthquake-prone city, we just can't get it," Whanau said.
However, some councillors said the move is short-sighted and that the capital will struggle to rebuild even with the new fund.
Councillor Geordie Rogers said the council would continue to be under-insured until there was a wider solution and that it would not be the last vote on the council's insurance issues.
"There will be plenty more and I hope in the future we can take more time to think about the broader impacts of our decisions."
Unions also opposed the move, arguing the fully privatised airport set a "dangerous precedent".
"The international evidence suggests it will be worse for workers, the environment and the economy that relies on air travel," Ashok Jacob of Unions Wellington said.
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