Air NZ begins airport court action

By DANIEL RIORDAN

Air New Zealand is taking Auckland Airport to the High Court, raising the ante in the dispute over higher landing charges and departure fees.

Other airlines have given their backing to the court action, which follows the airport's decision in August to raise landing charges by a cumulative 19.6 per cent over the next three years, beginning in September.

The airport also lifted its international passenger departure fee from $20 to $22, effective from this month. The statement of claim filed with the High Court at Auckland on Wednesday, and served on the airport yesterday, cites three major causes of action:

The airport failed to consult "substantial customers" before November 29 last year, as required under the Airport Authorities Amendment Act 1997, which was being used to set fees for the first time.

The airport failed to consult adequately, withholding certain critical information related to the increased charges.

The airport imposed increases for 2001 and 2002 without apparent intention to consult as required by law.

Board of Airline Representatives executive director Stewart Milne said that members held a special meeting yesterday morning and unanimously backed Air New Zealand's action.

It was customary for the home-based carrier to take the lead in action of this sort, said Mr Milne.

Air NZ spokesman David Beatson said the higher charges were especially hard to justify given that much of the airport's success was based on passenger volume increases in a natural monopoly business that was mainly fixed-cost.

The airport claims the increased charges and fees are needed to maintain its international standards.

Air NZ has more to lose from the increases than its peers. Last year (to June 30) it paid about half the airport's $46 million landing fees.

Unresolved arguments over landing charges have gone all the way to the High Court before. In 1992 and 1993, Air New Zealand, Qantas and Ansett NZ took Wellington International Airport to the High Court and lost. But that dispute was over final figures, not the methodology used.

The review behind the latest court action is the first under new legislation which requires the airport to consult airlines before setting its charges. But the airport has the final say.

The charges are based on an airline's return on assets and applied to airlines depending on the weight of their aircraft and their number of seats.

The airlines are upset at how the airport revalued its assets to set the charges.

Auckland Airport managing director John Goulter could not be reached for comment last night.

Competition watchdog the Commerce Commission said a month ago that it did not have power to investigate the airlines' complaints separately, but would include them in a long-term review into whether airports' monopoly positions justified price controls.