The New Zealand Airports Association this morning welcomed the decision not to proceed with an airport regulation inquiry.<\/p>\n
The association said the current framework promoted transparency, accountability and long-term investment.<\/p>\n
\u201cThe Government\u2019s position provides much-needed regulatory certainty. A stable and transparent regulatory environment is vital to New Zealand\u2019s economic growth agenda.\u201d<\/p>\n
Auckland Airport chief executive Carrie Hurihanganui said today\u2019s report gave certainty for investors.<\/p>\n
\u201cAuckland Airport owns and operates one of New Zealand\u2019s most strategically important infrastructure sites and we are investing to ensure it delivers for the future,\u201d she added.<\/p>\n
\u201cThese essential upgrades are creating jobs, boosting resilience, improving the customer experience and adding the capacity our national gateway needs for growth.\u201d<\/p>\n
She said Auckland\u2019s regulated per passenger domestic jet charges were rising by an average of $1.26 a year bewteen 2023 and 2027.<\/p>\n
Hurihanganui called that a fair and reasonable price for capacity and improvements being delivered to \u201cbenefit all airport users, including airlines\u201d.<\/p>\n
The Board of Airline Representatives (Barnz) said it welcomed the increased scrutiny.<\/p>\n
It said even though the commission ruled out a so-called Section 56 inquiry into the regulatory regime of airport services, today\u2019s decision would still bring some benefits to consumers.<\/p>\n
\u201cThe report, which examines the impact of major investment decisions made by regulated airports, finds that there is more that could be done to ensure benefits to consumers are delivered over the long term,\u201d Barnz said.<\/p>\n
It said the commission would make changes to information disclosure, which applied to Auckland, Wellington and Christchurch airports. <\/p>\n
\u201cAt present, this regulation is backward-looking and focuses only on the capital committed for a single pricing period, without considering the full impact of forward-looking investment plans,\u201d Barnz added.<\/p>\n
\u201cThis means the commission only makes findings after major capital costs are announced and building is already underway, regardless of whether airlines support investment and regardless of whether the cost of that investment might impact growth.\u201d<\/p>\n
Minister\u2019s response<\/p>\n
Scott Simpson, Minister of Commerce, said he was grateful for the Commerce Commission\u2019s work on the issues.<\/p>\n
\u201cI\u2019m pleased that progress is being made on the information disclosure requirements and the Commission\u2019s commitment to advancing this work,\u201d he added.<\/p>\n
\u201cThe Government remains committed to a strong and competitive aviation sector, supported by the Aviation Action Plan and work to strengthen airline connectivity.\u201d<\/p>\n
Simpson said the Government expected airports to engage constructively with the regulatory framework and demonstrate responsible pricing, especially during major investment. <\/p>\n
\u201cThe current approach relies on transparency and good faith, and I expect the regulated airports to uphold these principles.\u201d<\/p>\n
Air New Zealand chief executive Greg Foran in July wrote to Commerce Commission chair John Small.<\/p>\n
\u201cRegulated airports are contemplating large and sustained uplift in future investment programmes, particularly at Auckland Airport,\u201d Foran said.<\/p>\n
\u201cThe need for and scale of this uplift remains debatable,\u201d he added.<\/p>\n
\u201cThere is likely to be significant public benefit in the commission having a greater role in ensuring capital expenditure is appropriate and reflects what the public and the users need and can afford.\u201d<\/p>\n
Back in May, investment company Jarden said market concerns over Auckland Airport getting over-regulated were overblown.<\/p>\n