Price Control Study Of Airports

Commission Publishes Revised And Updated Critical Issues Paper For Price Control Study Of Airports

The Commerce Commission has released a paper detailing what it considers to be the critical issues for its price control study of Auckland, Wellington and Christchurch International Airports. The paper is a revised and updated version of an earlier paper released 2 July 1999.

The Minister of Commerce has required the Commission to report by 1 August 2002 on whether he should recommend the introduction of price controls on airfield activities provided by the three main international airports. Airfield activities are the activities undertaken (including the facilities and services provided) to enable the landing and take-off of aircraft.

Mr Belgrave said that the Commission is about to commence the formal phase of its inquiry. The Critical Issues Paper published today identified the areas the Commission is particularly interested in receiving information about, including the following: 1. Interpretation of the price control provisions of the Commerce Act; 2. Market definition and competition analysis; 3. Airport charging and cost allocation methodology; 4. Asset valuation; 5. Cost of capital; 6. Rate of return earned relative to cost of capital; and 7. Whether control of airfield activities should be recommended and how controls would operate.

Interested parties will be able to make submissions to the Commission and participate in a conference before the final report is presented to the Minister.

The timetable for the formal phase is:

By April 27 Interested parties make submissions on Critical Issues Paper. June 8 Commission publishes draft report stating whether price controls should be introduced and how they would be administered. By July 20 Interested parties make submissions on draft report and independent experts of interested parties provide reports. By August 17 Interested parties and independent experts make cross submissions. September 4-7, 10 and 12-14 Conference where interested parties can provide further information and the Commission will ask questions. The media and public can attend. November 2 Commission aims to report to Minister of Commerce.

Copies of the Critical Issues Paper will be available from the Commission's website at http://www.comcom.govt.nz/price, and its Wellington office, Level 7, Landcorp House, 101 Lambton Quay. They can also be requested by sending an e-mail to airports@comcom.govt.nz.

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