International Air Transport Association blasts Airways NZ for 21% fee hike

Airways is under fire for its air navigation service charges. Photo / Doug Sherring.

Airways has been blasted by an international airline body for hiking its charges by 21 per cent over three years while at the same time such charges are falling in Australia.

The International Air Transport Association says it welcomed Airservices Australia's move to reduce air navigation service charges by 2 per cent from July 1 while at same time Airways New Zealand will ''significantly increase'' fees.

''With Airways New Zealand, it is disappointing the considerable airline feedback provided during this pricing consultation process has been ignored, and airlines will see a cost increase," said Conrad Clifford, IATA's regional vice president, Asia-Pacific.

In the 2018 financial year Airways made a profit of $27.2 million on revenue of $214m.

Including further increases planned for 2020 and 2021, airlines will face a cumulative 21.4 per cent increase.

"At a time when airlines are facing a deteriorating business environment with rising fuel prices and a substantial weakening of world trade, every cost-saving opportunity matters," said Clifford.

Airways says prices were rising to cover investment in new equipment and systems.

The state owned enterprise said the final prices for 2019-2022 were determined following an extensive consultation process that included public presentations and individual meetings with major stakeholders including IATA and its members.

''We received 12 submissions, four from IATA and IATA members, and all were carefully considered before final prices were set,'' said Tim Boyle, general manager of air traffic services.

Airways was introducing ''future-focused'' services including digital air traffic control towers and drone traffic management.

''Throughout the price setting process, we worked to achieve a sensible balance between the need to invest in New Zealand's aviation network, while maintaining prices that are internationally competitive.''

Boyle said the industrial environment was ''challenging'' and external economic factors had impacted final prices.

These included lower air traffic volume growth and higher inflation that puts pressure on operating costs.

We have moved to partially offset these pressures by cutting $1.8 million from the proposed new revenue, and have adjusted Airways' cost of capital to 6.59 per cent.

Clifford said Airservices Australia was a positive example of the partnership with airlines.

''While we normally enjoy a similar relationship with Airways New Zealand, it is disappointing the considerable airline feedback provided during this pricing consultation process has been ignored, and airlines will see a cost increase in ANS charges from July," said Clifford.