Auckland airport charges 'not justified' - Comm Comm

2:50 pm on 26 April 2018

Auckland International Airport's forecast profits for the next five years look too high and will cost passengers more to fly, the Commerce Commission says.

Auckland Airport

Auckland Airport Photo: 123RF

In a draft report on the airport's charges until 2022, the commission said it was concerned the airport was planning a rate of return on its assets that was not justified.

"This difference in target returns could result in customers paying an additional 61 cents per flight over the next five years, or put another way - Auckland Airport earning an additional $47 million in profits after tax," deputy chair Sue Begg said.

Auckland Airport stood by its charges, however, saying they had been set to help fund its major capital spending on terminals, aircraft and cargo handling facilities, and a second runway over the next decade.

"Auckland Airport continues to believe that its prices ... are fair and reasonable given the approximately $2 billion investment the company is making in long-term infrastructure," chief financial officer Phil Neutze said.

The commission accepted many of the airport's forecasts, and asked for submissions before issuing a final report.

The commission cannot set airport charges as it can with gas and electricity companies, but the government is considering whether to bring them into the same system.

The Board of Airline Representatives, which represents airlines using the airport, said the company was essentially using them as a bank and charging them now for facilities that have not been built.

"We believe the airport should be getting shareholders to contribute with their fair share as they are the ultimate beneficiaries of the investment," the board's executive director, Justin Tighe-Umbers, said.

A transport analyst at broking house Forsyth Barr, Andy Bowley, said the Commerce Commission report was a mere slap on the wrist for the airport, but was not a good look for it when the government was considering greater regulation of the sector.

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