The Commerce Commission says Auckland Airport's targeted returns are not fully justified.

In its final report today on Christchurch and Auckland Airports' pricing decisions for the five-year period to June 2022, the commission said Auckland's returns are above its benchmark.

Deputy chair Sue Begg said the commission's view remains that the returns targeted by Christchurch Airport were generally acceptable, but Auckland's targeted returns were not fully warranted.

The commission estimates Auckland Airport would earn an additional post-tax return of $37 million on the majority of its regulated services – the equivalent of 50c per passenger per flight over the five years – compared to the benchmark.

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Airlines have responded by calling for Auckland Airport to hand back $53m (pre-tax) in excess charges while the airport company says it believes its pricing is fair and justified.

Begg said ''not all of this additional return necessarily represented excessive profits'' as Auckland Airport has provided some evidence that an appropriate return may be above that benchmark.

In response to the commission's draft report released earlier this year, Auckland Airport submitted that its targeted returns were justified given the risks associated with the significant investment programme it plans to undertake to manage passenger growth.

Andre Lovatt, General Manager of Auckland Airport development and delivery talks about the upgrades to the domestic terminal. / Greg Bowker

"We acknowledge that Auckland Airport's passenger numbers have grown significantly in recent years and could continue to grow. In this regard we believe its planned $1.8 billion terminal and aeronautical infrastructure redevelopment is likely to benefit consumers long-term by reducing congestion and improving service quality," Begg said.

"We consider that the risks associated with the investment programme could justify a return that is slightly higher than our benchmark estimate. However, we aren't persuaded that the full extent of Auckland's targeted return is warranted."

Auckland and Christchurch Airports are subject to a form of regulation called information disclosure, which involves the Commission shining a light on the airports' performances – their profit, investment, pricing, and service levels.

The commission considered the efficiency of Auckland Airport's pricing and its forecasts of operating and capital expenditure as part of its overall assessment of performance and found no major concerns in these areas.

"As signalled in our draft report, the returns Christchurch Airport is targeting for most of its regulated services are reasonable and consistent with promoting the long-term benefit of consumers," Begg said.

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The commission had no significant concerns with Christchurch Airport's expenditure and demand forecasts, or the efficiency of its prices.

The Commission considered the efficiency of Auckland Airport's pricing and its forecasts of operating and capital expenditure as part of its overall assessment of performance and found no major concerns in these areas.

It also noted that the incentives from the information disclosure regime have strengthened over time, as both airports' target returns are significantly lower than when they previously set prices.

The Board of Airline Representatives New Zealand (BARNZ) said it was time for Auckland Airport to hand the money back.

Auckland Airport has been found by the Commerce Commission to have failed to justify $53 million of charges at the expense of travellers and airlines and should hand the money back.

BARNZ executive director Justin Tighe-Umbers said in the increasing cost environment facing airlines it was now time for the airport to listen to the commission and adjust its pricing.

If the airport ignored the report's findings, the commission should exercise its new powers, under the Commerce Amendment Act passed last month, to review airport pricing and recommend stronger regulation.

"Auckland Airport continues to favour shareholders and handing them healthy dividends rather than looking for a balance that respects the passengers who must use its services because there is no alternative," he said.

Airlines appreciated that the airport has a $1.8 billion terminal and aeronautical infrastructure redevelopment planned and an upgrade of both domestic and international facilities is desperately needed.

"But right now, with the jet fuel price having doubled in the last 18 months, the last thing airlines and passengers need is $53m in excess charges from Auckland Airport."

Tighe-Umbers said excessive landing charges were not the only price hike that airlines are facing. The costs of aviation security and air navigation services are increasing and biosecurity costs are likely to follow.

"The cost of flying to New Zealand is mounting. We are already seeing rationalisation of routes by airlines, by either frequency, or seasonality."

he Company was pleased to see that the final report acknowledged the inherent uncertainty involved and that it is not possible to determine a precise measure of the right return for Auckland Airport.

Auckland Airport's chief financial officer, Phil Neutze, said the company would review the commission's findings in detail.

''Airport pricing is complex and we have provided comprehensive evidence to the Commission explaining why we believe our approach is fair and reasonable.''

The airport would carefully review how the commission has assessed that evidence in its final report and how this shaped its findings."

"Auckland Airport is investing circa $2 billion in long-term infrastructure over this five-year pricing period which is the largest airport development ever undertaken in New Zealand."