Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


Regulator affirms view Christchurch Airport prices too high

Regulator affirms view that Christchurch Airport prices too high, lack transparency

By Suze Metherell

Feb. 13 (BusinessDesk) – Christchurch International Airport’s targeted returns over the next two decades are too high and its pricing lacks transparency, the Commerce Commission says, affirming an interim view published in October.

New Zealand’s second-largest airport’s proposed pricing for 2012 to 2032 targets a return of 8.9 percent, above the 7.6 percent-to-8.5 percent range the regulator deems acceptable.

Wellington International Airport and Auckland International Airport are also regulated under the Commerce Act, which requires them to disclose price setting methodology, financial statements and business plans.

The commission is then required to report to ministers on how effective the disclosure regime is in promoting long-term benefit for consumers, limiting excessive profits, incentivising efficiency gains and passing on any gains to the customer.

“Overall, information disclosure regulation appears to have had little influence on Christchurch Airport’s conduct or performance,” Sue Begg, deputy chair at the commission, said in a statement. “Given the charges that Christchurch Airport has set, which were based on a 20-year pricing approach, our conclusion is that information disclosure regulation is not limiting excessive profits.”

Begg said the airport company “has signalled its commitment to improve transparency.”

In 2013 the airport grew revenue by 4.8 percent to $118.5 million and net profit declined by about 6.4 percent to $18.4 million.

Airlines, the biggest customers of the regulated services, say light-handed regulation allows airports to extract excessive profits.

“The latest finding 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,” said John Beckett, chief executive of the Board of Airline Representatives New Zealand, a lobby group that represents 21 airlines.

Beckett said the current disclosure regime for the airports is “too light-handed” and he called on the government to negotiate a pricing scheme more in line “with good international practice”.

Under the terms of the regulations, the commission doesn’t make any recommendations to the government as part of its review. Its review of Auckland airport found returns were within its target range while Wellington was deemed to have been targeting excessive profits, a view it has disputed.

Christchurch airport is about three-quarters owned by the Christchurch City Council.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Shocking Dairy Footage: MPI Failing Our Animals And Damaging Our Reputation

Greens “Nathan Guy needs to urgently look into how his ministry is enforcing animal welfare standards, how these appalling incidents happened under its watch and what it’s going to do prevent similar incidents happening again in the future." More>>


Land & Water Forum: Fourth Report On Water Management

The Land and Water Forum (LWF) today published its fourth report, outlining 60 new consensus recommendations for how New Zealand should improve its management of fresh water and calling on the Government to urgently adopt all of its recommendations from earlier reports. More>>



Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news