irlines dismayed at increased air navigation charges

Media Release May 19 2013

Airlines dismayed at increased air navigation charges

Airlines serving New Zealand are dismayed Airways New Zealand has increased its charges for air navigation services by 10.6 per cent from July this year.

The state owned enterprise publicly notified the hike in charges on Saturday.

John Beckett, the executive director of the Board of Airline Representatives New Zealand (BARNZ), says his 20 airline members do not believe these increases are justified. They come on the back of increases totalling 18 per cent over the past four years.

Airways can only increase charges by this magnitude because it is a monopoly supplier,” Mr Beckett says.

“BARNZ members are paying Airways approximately $140 million this year for air navigation services. This cost will increase to approximately $157 million for the year beginning in July. Each long haul flight will have to pay Airways around $1700 – $3200.

“These charges have a significant impact on the viability of long haul routes to and from New Zealand and ultimately the tourism sector.”

BARNZ is concerned about the high costs at Airways. “It appears the average Airways remuneration cost is now $143,000 a year, for example,” Mr Beckett says.

On top of these costs Airways has set for itself a return on capital of 7.8% after tax, which is well above the level that is reasonable for Airways, given its low level of risk.

Ends

© Scoop Media