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Wellington Airport is 'charging too much' - commission

Published: 9:44AM Friday February 08, 2013 Source: ONE News

Wellington Airport is making too much money for the services it offers, according to the Commerce Commission.

A report from the commission says a reasonable return for the airport is between 7.1% and 8%, but its analysis shows over the next five years Wellington Airport's expected to make up to 15.2%.

This means it is likely to recover between $38 and $69 million more from consumers than it says is reasonable.

More than 5 million passengers touch down and take off from Wellington Airport each year.

The Commerce Commission's Sue Begg said: "They're charging the airlines too much and ultimately they pass on the charges to passengers."

The airport's management claims the commission is just doing its sums wrong.

"What they need to be doing is looking at our historical and our actual earnings and if you look at those returns and use our forecasting model then you will see that we're only 8.1%...and they're using a hypothetical model not a real world modelling," said Wellington Airport Chief Executive Steven Sanderson.

Air New Zealand says higher prices are stifling local tourism.

"It's the airport who's choosing to take what's called excessive profits," said Air New Zealand Chief Operations Officer Bruce Panton.

"We all get that businesses need to make money Wellington's using the light handed regulatory situation to charge more and more and in particular for regional travellers, they're the ones shouldering this burden."

No recommendations have been made about regulatory changes around pricing. That is up to the Ministers of Commerce and transport who will now assess the findings.

Reports on Auckland and Christchurch airports are due out by the end of this year.