Auckland Airport charges still a threat to travellers

Auckland Airport charges still a threat to travellers

The Commerce Commission has found that Auckland Airport is targeting returns above the Commission’s assessment of a normal return. The Commission has calculated that consumers will be over-charged to the extent of $72m over the current five year pricing period.

Nevertheless the Commission concluded that the Airport’s returns are not so high as to suggest it will earn excessive profits because the Airport’s targeted 8.0% return lies just within the Commission’s estimate of an acceptable range of return of 7.1% to 8.0%.

Kristina Cooper, Legal Counsel for BARNZ, says while Auckland’s charges for landing aircraft on the airfield and for passengers passing through the domestic terminal are reasonable, the prices for passengers passing through the international terminal are excessive and generate an excessive profit.

“Airlines operating in a hugely competitive environment are forced to either pass those costs on, so those fees ultimately come out of travellers’ pockets, or else absorb the costs which can result in reduced services” Ms Cooper says.

BARNZ has constantly pointed out that New Zealand has one of the lightest handed regimes for airport pricing among developed countries. In BARNZ’s view the Commission’s conclusion that Auckland Airport will be over-charging consumers by $72m more than necessary to earn a normal return shows that the current regulatory regime is not protecting consumers from over-charging by airports.

“It is time for New Zealand to match good international practice and introduce some curbs on airports’ freedom to set whatever charges they like,” Ms Cooper says. “The Commission’s reports on first Wellington Airport and now Auckland Airport have shown the present regime is ineffective.”

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