17 Oct 2011

Airport plans big landing fee increase

8:07 pm on 17 October 2011

An airline lobby group says passengers will be stung with higher fares if Wellington Airport goes ahead with plans to significantly lift landing fees over the next five years.

The airport's new pricing proposal shows it plans to lift aeronautical charges from $61.8 million in 2013 to $95.2 million in 2017.

Board of Airline Representatives executive director John Beckett told Evening Business on Checkpoint it is a huge price hike which airlines won't be able to absorb, and will have to pass on to passengers.

He is critical of the way the airport calculates the charges.

"They attempt to justify it by revaluing assets substantially and pushing up the return on capital that they claim they should get and when you combine both those two it just pushes their revenue up hugely and yet it all represents just a big monopoly profit."

Mr Beckett says the airport should calculate the charges using principles established by the Commerce Commission

If they had done so, he says, prices would fall by 11% this year and remain stable for four years.

Wellington Airport says the Commerce Commission's calculation methods are designed for benchmarking purposes and and aren't intended to be used by airports to set prices.

The airport says it is already one of the most cost-effective in Australasia and prices are expected to remain competitive, with the average increase being less than 70 cents a passenger.

It says passenger numbers are expected to keep growing, which will lead to some increases in operating costs, but the real cost to passengers will fall over the five year period.