Air New Zealand has lodged an official request with Commerce Minister Andrew Bayly, seeking an "urgent inquiry into the regulation that is failing to constrain overspending by Auckland Airport".
The airport has proposed a $7-8 billion over 10 years. Air New Zealand says it thinks the development will be bigger than the combined investment by all three airports regulated by the Commerce Act over the past 30 years.
"This will be paid for by airlines through steadily increasing aeronautical charges, leading to unaffordable airfares for some Kiwis", the airline says.
Chief executive Greg Foran said this was the most any privately owned airport had spent in such a short time.
“The new airport will look great, but this spend doesn’t deliver an additional runway and there will be virtually no increase in airside capacity for more customers.
"By 2032 the value of the airport’s asset base, which dictates the size of its charges, will have increased per-passenger domestic charges five times, with more to come in the future.
“Air New Zealand agrees the airport needs redevelopment, but not at a cost that means some Kiwis can’t afford to fly. This issue affects all passengers flying through Auckland Airport – especially those from the regions."
Protests about investment are 'nothing new' — Auckland Airport
In a statement this afternoon, Auckland Airport said their domestic charges have been rock bottom for years – 40-50% lower than comparable airports.
"Charges are currently 3-5% of the cost of an average ticket. By 2027, charges will be similar to current charges at other major airports in our region.
"It is wrong to say Auckland Airport’s infrastructure upgrade will make travel unaffordable. Commentary on future prices is speculation as no prices have been set."
The statement continued: "Airlines protesting about airport regulation and investment is nothing new.
"The Commerce Commission is right in the middle of scrutinising what Auckland Airport charges airlines to use essential airport assets with the process due to be completed in September this year.
Auckland Airport said today’s move to circumvent the review process was because Air New Zealand had strong commercial incentives to oppose airport investment — both to protect its profit margins and its dominant position in the domestic market.
"Investment creates additional capacity that enables airline competition – which is good for customers and the cost of airfares."
ComCom review includes airport investment plan
The Commerce Commission told 1News it was continuing to look at the airport's pricing decisions as part of a pre-existing review.
It made no direct response to Air New Zealand's moves today.
Commissioner Vhari McWha said in a statement: "As part of our regulatory regime, we are currently reviewing Auckland Airport's expected performance for the period July 1, 2022 to June 30, 2027.
"This includes an analysis of Auckland Airport’s pricing decisions, which incorporates the Airport's investment plan, to assess whether they promote the long-term benefit of consumers. We plan to release our draft report on Auckland Airport’s performance in May for consultation, with the final review published later this year."
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