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.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Pest Control: Mouse Blitz Team Leaves For Antipodes

The Million Dollar Mouse project to rid Antipodes Island of mice is underway with the departure of a rodent eradication team to the remote nature reserve and World Heritage Area. More>>

Gongs Got: Canon Media Awards & NZ Radio Awards Happen

Radio NZ: RNZ website The Wireless, which is co-funded by NZ On Air, was named best website, while Toby Manhire and Toby Morris won the best opinion general writing section for their weekly column on rnz.co.nz and Tess McClure won the best junior feature writer section. More>>

ALSO:

Pre-Budget: Debt Focus Risks Losing Opportunity To Stoke Economy

The Treasury is likely to upgrade its forecasts for economic growth in Budget 2016 next week but Finance Minister Bill English has already signalled that more of his focus is on debt repayment than on fiscal stimulus or tax cuts... More>>

ALSO:

Fulton Hogan's Heroes: Managing Director Nick Miller Resigns

Fulton Hogan managing director Nick Miller will leave the privately owned construction company after seven years in charge. The Dunedin-based company has kicked off a search for a replacement, and Miller will stay on at the helm until March next year, or until a successor has been appointed and a transition period completed. More>>

ALSO:

Gordon Campbell: On Electricity, Executions, And Bob Dylan

The Electricity Authority has unveiled the final version of its pricing plan for electricity transmission. This will change the way transmission prices (which comprise about 10% of the average power bill) are computed, and will add hundreds of dollars a year to power bills for many ordinary consumers. More>>

ALSO:

Half Empty: Fonterra NZ, Australia Milk Collection Drops In Season

Fonterra Cooperative Group says milk collection is down in New Zealand and Australia, its two largest markets, in the first 11 months of the season during a period of weak dairy prices. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news