KEY POINTS:
Air New Zealand is taking Wellington International Airport to court over increased landing charges.
The airline is challenging the validity of a consultation process which it said predetermined increases expected by the airport's majority shareholder Infratil.
Wellington Airport said landing charges would increase by 2.85 per cent a
year for the next five years, effective from July 1.
However, Air NZ yesterday said it was seeking a judicial review and had filed proceedings in the High Court at Wellington.
The airline started a similar action against Auckland International Airport last month over a proposed annual rise of 2.5 per cent in landing fees over five years.
John Blair, general counsel for the airline, said the consultation process was an abuse of Wellington's monopoly position and failed to deliver benefits to passengers.
The airline's airport costs in Wellington would increase by more than 34 per cent during the next five years, Blair said.
"The charade of so-called consultation does nothing to constrain airports, which start with extortionate increases and seek to demonstrate an open mind by agreeing to lower, but still unjustifiable, increases.
"It's the childhood trick of 'If you want a dog, ask for a pony' played with consumers' wallets."
The airline had no option under the current regulations than to take court action, Blair said.
"The current review of the Commerce Act is a critical opportunity to establish a regime which introduces commercial reality," he said. "No other country has such a derisory price-setting regime. Airports' monopolistic behaviour must not be allowed to continue to choke the economic growth of New Zealand."
Wellington Airport said it would strongly defend the action taken by the airline.
Acting chief executive Mike Basher said the 2.85 per cent annual increase in landing charges was the equivalent of 30c a passenger on jets and less on regional aircraft.
"We believe that this was a modest increase in relation to a considerable capital expenditure programme," Basher said.
The increase in landing charges was directly related to an $85 million investment in runway safety and work to upgrade the international terminal and aircraft facilities.
The airport was disappointed in Air NZ's actions and did not think that court proceedings were justifiable, Basher said.
Wellington Airport was confident it could defend the judicial review, he added.
"The existing regime and the outcome of this consultation has, we believe, produced a good outcome."
Consultation with airlines had been undertaken for a year before the new charges were set.
"Wellington Airport is acutely aware of its statutory obligations in setting its landing fees and it is our view that we have undertaken the process thoroughly," Basher said.
"The regulation of airports in New Zealand has a track record of producing good investment in facilities and prices which are still low on a comparative international basis."
Landing Charges
* Annual increases of 2.85 per cent for the next 5 years.
* Equivalent to 30c for each passenger on jet aircraft.
* Charges are reset every five years.
* Air New Zealand to challenge increase in court.
