Norris launches departing jab at airport 'monopolies'

Outgoing Air New Zealand chief executive Ralph Norris has launched a parting volley at Auckland and Wellington airports over their monopolist profit margins.

"Airports in New Zealand have some of the biggest profit margins in the industry," Mr Norris told National Radio.

"If you look at Europe, airports have profit margins of around 35 per cent. We have two airports here in New Zealand -- Auckland and Wellington -- with margins above 75 per cent.

"That is underscored as a monopoly when you have the mayor of Manukau, Sir Barry Curtis, whose council is a significant shareholder in Auckland Airport, saying that (the airport) is a licence to print money."

Mr Norris, who leaves the airline on September 1 to head the Commonwealth Bank of Australia, called for the Government to establish a regulatory regime to bring New Zealand airport charges in line with overseas.

Air NZ yesterday posted an 8 per cent profit increase to $180 million for the year to June 30, but warned 2006 profits could fall by 40 per cent as record high oil prices cause operating costs to soar.

Mr Norris said Air NZ could no longer pass on increased fuel costs on to consumers, and would take a hit in 2006 with the price tag for next year's fuel costs increasing by $300m, even after recovering $200m from surcharges and taking into account hedges.

Air NZ will this week raise fuel surcharges on passenger fares for the fourth time since introducing the levy in May 2004.

Domestic surcharges will increase on average $6 a ticket, whereas international passengers will pay up to $20 more on a fare.

Benchmark Singapore jet fuel prices have spiked nearly 50 per cent in the past year to near record levels of nearly US$77.50 ($112.82) a barrel in mid-August.

Airline chairman John Palmer said yesterday the international search for a new managing director and chief executive could take close to four months. Given that time-line the post could be vacant until October.

In the meantime, Rob McDonald, chief financial officer, will assume the role. Mr McDonald is not seeking the job full-time.

The short list may include Kiwi or Australian expats that have made waves abroad. Such candidates could be Ray Webster, chief executive of UK budget airline easyJet, or Gary Chapman, president of Dubai airline Emirate's ground-handling and travel agent company Dnata.

Shares in Air NZ slipped a cent to $1.24 on yesterday's result.

- NZPA