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Auckland International Airport Ltd is to raise landing charges for airlines 2.5 per cent a year for the next five years.
Announcing the increase today, the airport company said it last increased landing charges in September 2001.
The company also said its airport development charge (ADC) - commonly
known as the departure tax - would from July next year increase from the present $25 per departing international passenger 12 years and over.
It would then be renamed the passenger service charge (PSC) and be levied on airlines, removing the need for passengers to pay the charge at the airport.
From July next year, the PSC would be split between departing and arriving passengers and would increase 50 cents per international departure and arrival each year for three years.
AIA chief executive Don Huse said the "modest" increases announced today were broadly in line with inflation.
"We believe these prices are very fair and reasonable, particularly given the significant investment programme over the last five years and the proposed investment programme over the next five-year period."
AIA general manager, aeronautical, Tony Gollin, who led the consultation process with airlines, said the change in the collection of the PSC would bring the airport's approach into line with that of international airport best practice.
"We have made quite a number of significant concessions in endeavouring to reach agreement with our airline customers. We have also acknowledged the very latest Australasian regulatory requirements in setting our new prices," Mr Gollin said.
"We have closely followed the opportunity cost valuation approach for airfield land recommended by the Commerce Commission."
AIA had placed a moratorium on asset revaluations for aeronautical pricing purposes until 2017.
"We believe our prices are very reasonable when compared to charges at comparable airports in Australasia and around the world," he said.
Since prices were last set, AIA had upgraded and expanded significant parts of the airfield and terminal buildings to ensure it could meet the anticipated growth in visitor numbers coming to New Zealand.
AIA was entering the final year of a four-year, $500 million capital expenditure programme.
Mr Huse said the airport was also seriously considering indications from the Government and border agencies that they had a strong interest in having the next stage of the arrivals expansion of the international terminal completed before the Rugby World Cup in 2011.
The airport had planned to have it finished in 2012 or 2013, with the 2-1/2 year project having an estimated cost of $150 million.
No final decision on the project had been made and the prices announced today did not reflect that project being completed on an earlier timetable, Mr Huse said.
AIA said its decision to agree to a moratorium on asset revaluations for aeronautical pricing purposes for the next 10 years was a significant change in approach.
It was in line with a solution proposed by the Australian Productivity Commission in its recent report into the price regulation of airport services in Australia.
AIA chief financial officer Robert Sinclair said the company hoped that approach would remove much of the uncertainty and tension in the price setting process in future.
"In addition, in settling prices for the next five years, we have recognised the unanticipated large increase in our airfield land values over the last pricing period by crediting $99 million to the airlines," he said.
That represent ed more than half the unanticipated increase in airfield land value.
The Board of Airline Representatives NZ, which represents all airlines operating in this country, criticised the new fees, saying it had demonstrated a substantial reduction in charges was justified.
Barnz executive director Stewart Milne said there had been some recognition by AIA during consultations that its previous price set in 2001 had resulted in over-recovery.
With the new prices, landing prices would be 13 per cent higher by the end of the five year pricing period, while the airport departure charge would increase to an effective level of $28 by 2010.
Mr Milne said Barnz had already requested the Commerce Commission investigate Wellington Airport's recently announced increase in charges.
That request was made on the grounds that Wellington's increase was based on an incorrect treatment of revaluations, and to a large degree that also applied to Auckland, Mr Milne said.
Barnz would be pointing that out to the commission.
"The Auckland Airport company is a natural monopoly with the legislative authority to set charges as it thinks fit," he said.
"Given the high profits Auckland Airport generates as a result of this environment it is no wonder that offshore investors are so interested in purchasing the airport and getting a piece of the action."
The London-based Transport Research Laboratory, which published worldwide benchmarking figures for airports, had identified Auckland Airport as the second most profitable airport in the world, Mr Milne said.
"We need changes to the way airport prices are set and the regulatory environment so that airlines and travellers get a fair go."
- NZPA
