Complaints about Chch Airport’s monopoly pricing vindicated

13 February 2014

Airlines’ complaints about Christchurch Airport’s monopoly pricing vindicated

Airport companies need to be subjected to firmer price regulation says the Board of Airline Representatives New Zealand (BARNZ) chief executive John Beckett.

“The final report on Christchurch Airport’s pricing plans by the Commerce Commission proves it,” he says. “The present regime is too light-handed and leaves the airports free to charge excessively when it pleases them.”

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

The report says the Commission’s overall impression is that “information disclosure regulation has had little influence over Christchurch Airport’s behaviour”.

“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”.

”The Commission has already concluded that Wellington Airport is pricing excessively and that Auckland Airport has set charges that, while not excessive, were still above a normal return” Mr Beckett says.

“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.”

In December the High Court confirmed the Commission’s method for setting airport prices. Mr Beckett says this means that, with the completion of the Christchurch Airport report, the issue of airport pricing is now in the Government’s basket.

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

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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