Wellington Airport making 'excessive profits'

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 profits."

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 return.

"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

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