You are using an older browser version. Please use a supported version for the best MSN experience.

Auck Airport CEO defends landing charges

NZ Newswire logoNZ Newswire 8/06/2017 Rebecca Howard

Auckland International Airport's new landing charges strike a fair balance says chief executive Adrian Littlewood, downplaying criticism from the Board of Airlines Representatives that the charges are "unjustifiably high".

"To be able to put $1.8 billion of investment in and to be able to hold prices at a very modest, almost flat level I think is a good outcome for travellers," Mr Littlewood told BusinessDesk.

"We have tried to set a very fair balance in terms of investing for the future and also setting reasonable prices."

Auckland Airport on Thursday announced plans to invest $1.8b in aeronautical infrastructure by 2022 and said over the next five years average international passenger charges will reduce by 1.7 per cent in real terms each year while domestic passenger charges will increase by 0.8 per cent per annum.

According to the company, its new prices for the 2018-2022 financial years will target a return on investment of 6.99 per cent. It is expecting total passenger numbers to rise from 19.8 million in the current financial year to 22.6 million in 2022.

In nominal terms, however, average revenue on a per passenger basis is expected to be $22.98 in the current financial year and will rise to $23.50 by 2022. For domestic passengers, it is expected to be $5.73 this year and $6.57 in 2022.

The new prices will apply to airlines operating at Auckland Airport between July 1, 2017, and June 30, 2022.

The Board of Airlines Representatives, which represents 28 airlines including national carrier Air New Zealand, Air China and Qantas Airways, said the target return on capital exceeds a profit benchmark set by the Commerce Commission.

"The airport company has not demonstrated that consumers will benefit from paying these high prices. These prices will only benefit AIA shareholders," it said in a release.

Mr Littlewood said the remarks were a bit disappointing as Auckland Airport has engaged with the lobby group and all the major airlines on the pricing structure for the past 12 months in what he said was a "robust and transparent process".

image beaconimage beaconimage beacon