The airport will now discount airline charges for the final two years of the price-setting period. File photo. Photo: 123RF
Auckland Airport is cutting its fees after it was found it is overcharging by almost $200m, but an airline representative says there needs to be better oversight of the airport.
A final report by the Commerce Commission into Auckland Airport's fees found the airport is targeting excess profit through aircraft landing and passengers terminal charges, with businesses and consumers likely to carry much of the cost burden.
Last year, Air New Zealand said last year the airport's charges were expected to add about $46 to the price of a domestic ticket by 2032.
In the wake of the report, Auckland Airport said it will cut its fees for the next two years. It will discount per passenger airline charges on an average basis by about $1.10 for regional travel, $1.70 for domestic jet travel, and $4.80 for international travel.
But Board of Airline Representatives executive director Cath O'Brien said the cutting of fees was nothing new from the airport.
"Here we are again, Auckland Airport is very slightly lowering its target return for this price period, just as it did five years ago in the same sort of way. And it's lowering its target return, which will mean very, very slight reductions in charges, although prices will still rise to pay for the development over time.
"Another important point to make is that airlines that have flown to Auckland Airport since 2023 have been paying the higher prices, and it may not be those same airlines that fly as often to Auckland Airport over the next two years, so people who have paid the higher prices won't necessarily get a refund."
She said prices will still rise for airlines to pay for the build each year - just a little less.
O'Brien said there should be far better oversight of the airport and its monopoly.
"Auckland Airport is 75 percent of the flying into New Zealand, more or less, and it is has a $6 billion-odd capital plan that needs to be paid for wholly out of airport fees, and this whole song and dance we have about reviewing prices and setting a target return just slightly above where they think they are going to get it, and then lowering the target return just very slightly and saying there is nothing to be seen here, it's all fine - it really is not appropriate oversight of something so significant."
She said the big concern for customers was that they will not have as much choice for air travel as the price of landing in Auckland Airport continued to rise.
"Auckland Airport's demand is flat, and part of the reason for that is the ever-increasing prices, and so customers who might be looking for a better deal, they're not going to see any competition in such a high cost environment, because airlines are quite easily able to turn away from Auckland airport."
In a statement, Auckland Airport chief executive Carrie Hurihanganui said it respected the Commerce Commission's findings and had worked to apply price discounts for the remainder of the pricing period.
These discounts will bring their prices within the range the Commerce Commission found to be reasonable.
She said Auckland Airport carefully balances how it set charges with the need to invest in the future resilience and capacity requirements of New Zealand's gateway airport and one of the country's most critical infrastructure assets.
"To support this, investors require fair returns and a stable regulatory regime."
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