Wellington International Airport is charging too much for
planes to land on the tarmac, the Commerce Commission says.
The commission's final report has made a ruling on a
long-running battle between the airport and airlines.
The report, released today has found the current pricing
regime meant there was nothing stopping the airport from
making "excessive profits".
"We have found that the information disclosure regime is
effectively promoting innovation, quality and pricing
efficiency by the airport," Commerce Commission deputy
chairwoman Sue Begg said.
"However we consider that the regime has not been effective
in limiting Wellington airport's ability to extract excessive
Ms Begg said the airport was likely to make a profit of
between $38 million and $69 million more from consumers
between 2012 and 2017 than it needed to make a reasonable
"We think a reasonable return is 7.1 per cent to 8 per cent.
Wellington airport's expected return is 12.3 per cent to 15.2
per cent," she said.
"The excessive profits are largely attributable to Wellington
airport valuing its land higher than we think it should, and
Wellington airport targeting a higher return than appropriate
for its circumstances.
"Our assessment of returns has been based on the relevant
input methodologies, which were known to Wellington airport
before it set its prices for the period 2012-2017," she said.
Wellington Airport is challenging the commission's input
methodologies in the High Court at Auckland this morning and
the commission may update its report to Ministers depending
on the outcome of that hearing, Ms Begg said.
The review did not make any recommendations about what
regulation should apply to Wellington airport in future.
Reports into landing fees for Auckland and Christchurch were
due out later this year.
- Rebecca Quilliam of APNZ