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Home / Business / Companies / Airlines

Regional airports at risk in push to change pricing regime, says NZ Airports

Grant Bradley
By Grant Bradley
Deputy Editor - Business·NZ Herald·
27 Jan, 2020 02:30 AM4 mins to read

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Hawkes Bay Airport's expansion proves the funding system works says and airport group. Photo / Duncan Brown

Hawkes Bay Airport's expansion proves the funding system works says and airport group. Photo / Duncan Brown

An airports group says lobbying by airlines threatens the future of regional airports to pay their own way.

Proposed changes to the Civil Aviation Act will change settings for the way airports can set charges.

Chief executive of NZ Airports, Kevin Ward, said changes sought by airlines would threaten the ability of regional airports to pay their own way, and make it more likely costs would be pushed on to ratepayers.

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A law change would remove airports' ability to charge as they see fit but Ward says the smaller regional airports could be the big losers.

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''It is easy for airline lobbying organisations like the Board of Airline Representatives (Barnz), who represent large international airlines including Air New Zealand, to ignore the community building role of regional airports when lobbying for changes to airports' ability to set and collect charges,'' said Ward.

The association has previously identified around a dozen regional airports had been labelled non-commercial.

Those "at risk", he said, were Kaitaia, Kerikeri, Whangarei, Whakatane, Taupo, Whanganui, Masterton, Westport, Hokitika, Timaru and the Chatham Islands.

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Ward said his group did not support the law change which would take away the long-standing power of airports to set charges after consultation with airlines.

Prime Minster Jacinda Ardern at the opening of Nelson Airport's new terminal.  Photo / Supplied.
Prime Minster Jacinda Ardern at the opening of Nelson Airport's new terminal. Photo / Supplied.

''We know the destabilising impact it will have on the ability of New Zealand's regional airports to serve their communities.''

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While airlines may disagree, Ward says the ''real story'' of this proposed change is not what large international airports charge domestic and international airlines for aeronautical services.

''Those airports are continuously monitored by the Commerce Commission, and that regime is proven to be working well,'' said Ward.

''Our regional airports from the Bay of Islands to Southland rely on the ability to collect fair charges from airlines. Of course, these are passed on to passengers. But they are modest charges, and they are thoroughly consulted with the airlines in a process that is completely transparent on the airport side.''

The main airports - Auckland, Wellington, Christchurch and Queenstown - charge between $6.06 and $11.98 for domestic passengers (including regional flights).

Ward said when measured in 2018, the average per passenger charge at regional airports was a ''shade over'' $6 for a flight on a Dash 8 Q300 plane.

''Even though the current charge-setting framework is working well, the Government has proposed changing it in the consultation draft of a new Civil Aviation Bill. They also propose dropping the requirement for airports to operate as commercial enterprises,'' said Ward.

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The association has 37 members running 41 airports.

''Communities need their airports to remain as self-sufficient as possible. A number of New Zealand's less-busy airports are already in the situation of needing ratepayer support,'' he said.

He cited a comment by Prime Minister Jacinda Ardern when she opened the new Nelson terminal last year where she said whether they were big or small, airports were a symbol of connection, and formed an important part of New Zealand life.

Tauranga Airport has grown and been revamped in the past few years.  Photo / Andrew Warner
Tauranga Airport has grown and been revamped in the past few years. Photo / Andrew Warner

"It helps us maintain links with other regions, but also with one another – and in a country where half the population lives outside the main centres, it is vital to our wellbeing and prosperity that we are able to maintain those links," she said.

Ward said the existing well-proven legal framework was shown by the ability of airports like Invercargill, Timaru, Napier, New Plymouth and Tauranga to replace their ageing and outgrown terminals.

The legislation is now moving through Parliament although it is not known whether what has been described as the biggest shakeup of aviation law in a generation will be passed in this term.

Transport Minister Phil Twyford told the Herald earlier this month that ''consultation on the draft bill is being carried out so the Government can strike the right balance for everyone in the aviation sector".

When the bill was released for consultation last May, Twyford said the changes touch on every part of the aviation sector – from drones to lost luggage.

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