Auckland Airport is about to make its long-awaited response to the Commerce Commission report on its charges with one analyst forecasting it will lower its aeronautical pricing.
The airport company reports its half-year profit on Friday and chief executive Adrian Littlewood said he couldn't release details but the company would be saying something then, now that it had ''taken the time to reflect'' on the findings.
In a report released on October 31, the commission found that the company could be overcharging by up to $37 million in the current five-year pricing period.
Forsyth Barr head of research Andy Bowley said in a note the company was expected to lower its pricing.
The airport has been under intense pressure from airlines over the charges and Commerce Minister Kris Faafoi has repeated a please explain message to the company during the past two months.
While it says its airfield charges are a central part of providing new infrastructure, airline lobby groups including the Board of Airline Representatives say it is exploiting its monopoly position. The minister has alluded to the possibility of further regulation over airports.
The Commerce Amendment Act passed last year has introduced a shorter inquiry process for the commission to assess whether further regulation is needed at airports.
The airport is 22.4 per cent owned by the Auckland Council, and Forsyth Barr describes the airport as being very profitable with non-regulated earnings.
''However, earnings growth has slowed due to the regulatory price re-set, slower passenger growth and increased depreciation and interest burden from a major lift in capex. Moreover the recent ComCom final report on aeronautical pricing creates downside risk to earnings,'' Bowley said.
The airport has now almost completed a major rebuild of its 30,000sq m departure area, with more food outlets and expanded duty free retail outlets and more luxury stores.
Bowley questioned how much upside there would be from the retail refurbishment now that the duty free expansion was fully cycled last year.
And he said there were also doubts over capacity growth.
Although growth remained positive for the rest of the financial year, the exit of Hong Kong Airlines and Air AsiaX would challenge growth beyond that.
''Moreover the risk of a slowdown in Chinese inbound passengers appears increasingly real.''
Littlewood, speaking at a briefing late last week, said there would be some ''settling'' as tourism growth came off its near double digit growth.
Singapore Airlines and partner Air New Zealand were boosting capacity through that hub, while the Kiwi carrier had opened some new long haul routes, Taipei and Chicago, and American Airlines had built to year-round services.
There was still room for extra services to established markets, particularly the United States.
Tension with China, and reports of tourists cancelling trips, could be overblown.
He said some people at the moment were trying to join dots that were disconnected.
'''I think the key thing is everyone has to breathe through their noses and breathe deeply.''
The company is in the final stages of gaining approval for its Northern Runway, which could be operational by 2028.
Littlewood said there were 228 capital projects on right now as it builds the ''Airport of the Future''.
Start dates had not been put on the international arrivals terminal and domestic jet terminal that would become part of an integrated international terminal.
''We're going to be busy for the next five to 10 years. There's an awful lot to do - it's probably the biggest private infrastructure project in the country by some distance,'' he said.