International air fares to rise due to security costs

International travellers flying out of provincial airports could find more than $25 added to their fares to cover the cost of extra passenger security systems, the Government indicated today.

Finance Minister Michael Cullen said the Government had agreed to contribute $55 million to cover extra airport security costs at New Zealand's seven international airports, leaving the industry to contribute $49 million a year.

It has yet to be decided how the costs would be spread around Auckland, Wellington, Christchurch, Palmerston North, Hamilton, Dunedin and Queenstown Airports.

Dr Cullen said the funding package had followed extensive consultations that would satisfy most of the industry.

"Although there are some areas of disagreement," Dr Cullen said.

It had been decided that the costs would fall on those receiving the most benefit.

"The small modification to this rule is that the Government will heavily subsidise rather than fully fund biosecurity and customs services at the regional airports (Hamilton, Palmerston North, Dunedin and Queenstown) where the processing costs are significantly higher that at the larger metropolitan airports," Dr Cullen said.

Indicative biosecurity and customs costs at each airport are:

*Palmerston North, Queenstown - $4.94;

*Dunedin - $2.21

*Hamilton - 0.99c

*Auckland, Wellington, Christchurch - zero.

Passengers could face a range of higher aviation security charges, dependent on the model decided upon.

A flat rate evenly spreading the charge would result in an $8.16 fee for every international passenger.

A split metro/regional two-tier charge would see Auckland, Wellington and Christchurch passengers pay $7.50 and others pay $25.80.

A charge based on the actual costs of running the security services per passenger would be:

*Queenstown - $121.15;

*Palmerston North - $35.29;

*Hamilton - $25.76;

*Dunedin - $25.08;

*Wellington - $11.81;

*Christchurch - $9.15;

*Auckland - $6.24.

Dr Cullen said the costs at the airports were dependent on how many passengers went through them.

He said it was extremely unlikely that location-specific charges that would hit Queenstown hard would be chosen.

Dr Cullen also said anyone considering opening a new international airport should be warned they would attract no government subsidy and would have to cover all biosecurity, customs and security costs.

Those who had contemplated new international airports at Whenuapai and Invercargill would have to look closely at the economics of running an airport that may only handle a small number of passengers, Dr Cullen said.

- NZPA