New Zealand has taken the decision not to regulate Auckland International Airport charges, rejecting a recommendation of its own Commerce Commission.
The commission spent four years considering the possibility of regulating the fees charged by New Zealand's privatised airports. Those airports must consult with airlines, but the government does not currently regulate their fees.
The commission concluded that Auckland was the only airport charging too much, and it recommended controls for the country's main gateway.
But Commerce Minister Lianne Dalziel rejected this idea. She calculated that if airlines passed on the full reduction in charges that regulation would bring, it would only lower one-way airfares by 35 NZ¢ (¢20). That small benefit, she reasoned, did not offset the risk that regulation would discourage airports from investing and upgrading facilities.
Citing the recent example of a 78% rise in fees by Wellington airport, Air New Zealand responds that, along with other carriers, it is now "faced with a situation where there is no market competition in airport supply and, in the absence of price controls, airports have been sent a clear message that they can charge what they like." This is exactly what Wellington has done, adds the carrier, pointing to a recent decision by the airport to increase charges.
The Australian Competition and Consumer Commission (ACCC) is taking a different view, and has just turned down a request from Australia's air traffic control agency to boost airport charges. The ACCC claims the price request was based on short-term policies and comes "at a time when the aviation industry is experiencing a downturn".
NICHOLAS IONIDES SINGAPORE DAVE KNIBB BRISBANE
Source: Airline Business
