The great New Zealand airport rip-off

24 July 2006

The great New Zealand airport rip-off

Air New Zealand today labelled Auckland airport's increase in the valuation of its total assets by $1.4 billion nothing short of a rip off.

"This valuation is beyond belief," said Rob Fyfe, Chief Executive Officer. The airport is claiming a 1.2 billion dollar increase just in the value of its land alone. That's an increase of 260 percent in four years."

Auckland Airport's last valuation was in 2002, which estimated the total worth of its property, plant, equipment and investment properties at $1.3 billion.

Today's valuation estimates the airport is worth $2.7 billion.

"Auckland Airport is asking us to believe that it is almost double the value of Melbourne Airport which serves a city of four times the size," Mr Fyfe said.

He noted the timing of Auckland airport's valuation release today was very convenient.

"The airport and airlines are currently due to enter the next round of consultations to settle the user charges airlines pay for the next 5 years. Ultimately we believe grossly inflated valuations like this will be used to justify extortionate increases in airport user charges," he said.

Air New Zealand's Chief Financial Officer Rob McDonald noted that in the end it is the travelling public who end up paying for those increased charges, on top of other excessive costs they are already bearing such as inflated parking charges, taxi and rental car levies and departure charges."

Mr McDonald said he was sure this was not what the Government had intended when it originally sold its 52 percent shareholding in Auckland airport in 1998 through a public listing for $391 million, which would have valued the company at less than 30 percent of today's valuation.

"What we are seeing is the complete collapse of a regulatory framework that was inadequate in the first place."

"It's now open slather on travellers."

Mr McDonald said several of New Zealand's airports were among the most profitable in the world. Today's announcement made it clear that airports were intent on continuing to indulge in monopolistic price gouging.

He called for an immediate Government review of the airport regulatory framework to protect New Zealanders and the tourism industry from this display of greed.

ENDS

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