BARNZ at Australian Productivity Commission

BARNZ at Australian Productivity Commission

Last week BARNZ’s Executive Director, Justin Tighe-Umbers, presented to the Australian Productivity Commission in Melbourne.

The Commission is reviewing the regulation that applies to Australian airports, which is intended to make sure the airports over there set fair prices and deliver good quality services.

BARNZ is interested because what happens in Australia has an impact in New Zealand – regulators and governments here are often interested in Australian examples and want to know how we compare to Australia.

The Productivity Commission’s Draft Report took the view that most Australian airport pricing was reasonable and negotiate/arbitrate regulation is not a good idea. Airlines strongly disagree with this view.

BARNZ’s presentation explained why negotiate/arbitrate is a good option, and also described the benefits of some features of the New Zealand system – that the regulator sets a target rate of return, which all parties can use as a benchmark; and that the regulator reviewed each airport’s aeronautical prices and published a report that the airport could then respond to.

Justin Tighe-Umbers emphasised that while these features are helpful, we still need negotiate/arbitrate regulation to drive proper, constructive commercial relationships between airports and airlines.