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Airlines’ complaints about Chch Airport’s pricing vindicated

Media Release 15 October 2013

Airlines’ complaints about Christchurch Airport’s monopoly pricing vindicated

The Commerce Commission has released its review of the pricing path Christchurch Airport put in place in October last year.

In that report the Commission says that information disclosure has not been effective in limiting expected excessive profits over the 20 year pricing period on which prices are based.

The Commission stated that its ‘overall impression is that information disclosure regulation has had minimal influence over Christchurch Airport’s behaviour’.

The Commission commented that ‘although the regime has only been in place a short time, we would have expected evidence that Christchurch Airport has had direct regard to it…. We do not have that evidence’.

John Beckett, the executive director of the Board of Airline Representatives New Zealand (BARNZ) says “the Commission’s report further demonstrates that a firmer form of price regulation is needed in New Zealand. The present regime is too light handed and leaves the airports free to charge excessively.”

Mr Beckett said that “the Commission has already concluded that Wellington Airport is pricing excessively and that Auckland Airport has set charges so as to earn above a normal return, albeit not excessive. The finding released today by the Commission that Christchurch Airport is targeting excessive profits over its 20 year pricing path shows that airports need to be subject to a stronger form of oversight than just information disclosure.”

Mr Beckett says BARNZ will reiterate its call to Government for it to apply the negotiate/arbitrate regime to airport pricing in New Zealand to bring it into line with good international practice.

About BARNZ:

The Board of Airline Representatives New Zealand Inc (BARNZ) is an incorporated society representing the interests of its member airlines, which operate scheduled international and domestic services. Its members are:

Air Calin Air New Zealand (Group) Air Pacific

Airwork Air Tahiti Nui Air Vanuatu

Cathay Pacific Airways China Airlines China Southern

Emirates EVA Airways Fieldair

Korean Air LAN Airlines Malaysia Airlines

Menzies Aviation (NZ) Virgin Australia Qantas Airways (incl Jetstar)

Singapore Airlines Tasman Cargo Airlines Thai Airways International

ENDS

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