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Civil aviation charges rising to resource loss-making CAA

Civil aviation charges rising to resource loss-making safety service

Aug. 28 (BusinessDesk) - The government is moving to end underfunding of the Civil Aviation Authority, announcing a new funding framework that will raise $14.1 million over the next three years.

Transport Minister Gerry Brownlee announced the changes, which follow an Auditor-General's report in 2010 that raised concerns about the CAA's performance and capability, and a $7.5 million restructuring.

While it will add 41 cents to the cost of an international ticket, the levies for domestic air passengers is falling by seven cents a ticket as the new funding seeks to recover costs fully from the parties who bear them.

The CAA recorded a deficit of income over expenses of $7.45 million in the year to June 30, 2011, better than the projected deficit of $12.99 million, according to the most recent annual report on the authority's website.

The new funding will "improve air safety and ensure users meet the true cost of the services they receive," said Brownlee.

The new funding framework affects all civil aviation fees, and levies, which last year totalled $22.16 million. The charges will come into effect on 1 November.

It will recover an extra $14.1 million over the next three years from commercial aircraft operators, passengers and pilots after a 15 year gap between funding reviews had left fees and charges "considerably lower than needed to meet the related costs, and levy-payers are cross-subsidising others."

For large operators, the impact should be less than 0.5 percent of their annual fuel bill, and less 0.6 percent for small operators, said Brownlee.

(BusinessDesk)

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