Airlines say that they are surprised and disappointed by Auckland International Airport’s announcement that it will go ahead and spend $3.9 billion on infrastructure.
Cath O’Brien, executive director of the Board of Airline Representatives says independent economic research shows the spend will ultimately make it too expensive for some people to fly.
“This $3.9B spend gets pushed on to airlines in fees that end up in ticket prices,” O’Brien says. “Airlines are frustrated by the airport’s action.”
Legislation means airports must consult before deciding to go ahead with capital expenditure.
O’Brien says BARNZ was in the middle of that consultation, with final submissions not due until next week before the airport is required to make a pricing decision by June 30. Once a pricing decision is made, this normally goes to the Commerce Commission to run its economic ruler over it.
BARNZ has for several years asked for the Commerce Commission to be given teeth to not only review airport expenditure plans, but to make binding decisions if it thinks the plans are unfair to affected parties.
“Prices set on the basis of this scale of capital investment risk damaging the aviation market to, and within, New Zealand,” O’Brien says. “The airport is a monopoly. No company should be able to engage in monopolist behaviour in an economy like New Zealand.
“Airlines want to make sure people can afford to fly around New Zealand, and that international carriers are attracted to operating here. This will seriously challenge both.”
Aviation is only just beginning to recover to New Zealand post COVID, O’Brien says. There are fewer airlines and fewer flights coming to the country, combined with burgeoning costs across the whole aviation sector.
Increased costs from Auckland Airport’s spend would add to that and make air travel in New Zealand much more expensive compared with other countries, where airports have successfully completed upgrades at much lower cost than what Auckland is proposing.
“Investment of such significance should be something we negotiate with the airport company, and something we make sure not only travellers, but also the New Zealand economy can afford,” O’Brien says.
“Instead, Auckland Airport is pressing ahead with capex decisions, ignoring airline concerns and the required process. Airlines consider this is both unwise and unjust. .”
For media enquiries, please contact: Cath O’Brien, Executive Director, BARNZ
M: +64 21 730 557