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Proposed policy changes a threat to airports

The New Zealand Airports Association (NZ Airports) has warned the Government that the Civil Aviation Bill proposals affecting airport charge-setting are a recipe for dispute and litigation, and put future airport capacity, regional economies and social links at risk.

NZ Airports chief executive Kevin Ward says that airports of all sizes across New Zealand are providing excellent passenger terminals and airfield infrastructure for their regions, but their ability to keep up with growth and maintain high quality facilities for passengers would be gutted by policy changes currently under consultation.

“Airports are an infrastructure success story in New Zealand, said Mr Ward, with numerous examples of redevelopments around the regions, from Invercargill to the Bay of Islands, to cater for recent growth and provide regions with essential air connections for the future.

“Unfortunately, the stable, well-understood and fair system for setting airport charges that has produced such good results over decades for communities and travellers would be thrown aside under changes proposed in a Ministry of Transport draft Bill.

Currently airports must undertake thorough and transparent consultation with airlines, including all costs and forecasts, and are able to set charges at the end of consultation. Lobby group Airlines for Australia and New Zealand is urging the New Zealand Government to proceed with the draft policy changes, saying that airport users in New Zealand are getting a raw deal in both cost and experience.

“The most unfortunate thing is that the proposals don’t address a real problem - air travellers can see all the good work being done around the country - but in their current form the policy changes will certainly create a problem, said Mr Ward.

“We think it is a major mistake to make law changes that would allow the major airlines to delay, dispute and refuse to pay fair and reasonable charges, said Mr Ward. Charges at regional airports in 2018 averaged $6 to $7 per passenger on a Dash-8 aircraft – a small part of air fares.

“We have explained in our submission how the tremendous market power of airlines needs to be counterbalanced in the legislation, as it is now. A dominant airline can exercise its market power to refuse to pay airport charges, and dispute necessary airport developments, simply because it can.

“Our communities would have little choice if they want to stay connected by air. No airport would shut its runway or terminal – they are public infrastructure. Air travel is an essential economic and social link with the rest of New Zealand, and provides much needed resilience in disasters.

“The solution is simple, the current pricing framework produces the right balance and great results for New Zealand, said Mr Ward. For further information please contact:

Kevin Ward
Chief Executive
(021) 384 524