Auckland Airport says its charges are “highly competitive”

Press Release – Auckland Airport
Auckland Airport has welcomed the Commerce Commission’s draft report released today, which shows Auckland Airport has operated transparently and constructively within the regulatory framework for the benefit of the travelling public and New Zealand’s economic growth. 

“We’ve listened to our airline partners, and we believe our international and domestic pricing models are highly competitive compared with other leading airports in New Zealand and around the world,” said Auckland Airport’s Chief Executive, Adrian Littlewood.

“The Commerce Commission has concluded the current disclosure regime is working. Auckland Airport is committed to full and constructive participation in the regulatory process that relates to airports, airlines and the travelling public.”

Successive accolades in the World Airport Awards are testament to Auckland Airport’s focus on expanding the quality and range of products and services for consumers across all parts of the airport experience Mr Littlewood said. In the 2013 awards, Auckland Airport was named the Best Airport in the Australia / Pacific region for the fifth year in a row and was also awarded Best Staff Service for the Australia Pacific region. Auckland also came second globally to Vancouver in the Best Airports by “size of airport”, for airports handling 10 to 20 million passengers annually.

“Airport charges are designed to achieve a reasonable return on significant investments in essential long-term national infrastructure.  Our charges are very competitive alongside other leading airports and represent a fair deal for airlines and the travelling public. We have endeavoured to stimulate greater passenger choice and airline competition by actively promoting New Zealand in overseas markets.”

International benchmarking shows that total charges to operate at Auckland Airport are ‘middle of the pack’ compared with its peers, and domestically they are below the average for airports in this region.

Total charges per turnaround for international flights – All aircraft types (NZ$)

Source: Leigh Fisher analysis, 2013.  Total turnaround costs include landing charges, aircraft parking charges, passenger related charges, security charges and terminal navigation charges. While the first three of these charge types are imposed by airport operators the approach to other charges varies by airport and Leigh Fisher and Airbiz calculations take this broader approach to ensure comparability across airports.

Domestic turnaround cost – A320 planes (NZ$)

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Source: Airbiz, 2013

Our share of charges, broken down on a passenger basis, amounts to $5.55 per domestic passenger and $21.55 per international passenger.

Mr Littlewood said, “When prices were recently set there was a small increase in domestic charges to help fund much-needed capacity improvements at the Auckland domestic terminal.  While on international we were able to reduce in the average cost for an international passenger.

“The travelling public and New Zealand’s economy are the ultimate winners of the transparent regulatory environment which came in in 2008. For example, since 2008 total seat capacity on international and domestic routes has increased by more than a million seats. International return flights are up by around 3,200 with more than 11,000 seats available return per month to the U.S. through Hawaiian Airlines and China Southern Airlines providing an additional 18,000 seats return per month to China.”

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“If you add this to other innovations such as the reduction of international airport arrivals processing time since 2008 by 27 minutes, down to 18 minutes today, we deliver great overall value to the travelling public,” Mr Littlewood added.

Beyond benefits to the travelling public, Auckland Airport’s active role in route development has national benefits.  Every incremental daily widebody aircraft service delivers approximately $125m to the country per annum, and the growth in the China market is a clear example of the potential contribution to the country. The Chinese visitor holiday market has increased by 40 per cent year on year and spend has increased by 27 per cent to the year ending June 2012, reaching an estimated $522 million total value.*

“Auckland Airport is a strong supporter of government strategy to secure the benefits of increasing the number of visitors and the value they bring to our country and to help our exporters in growing the sector and increasing earnings. The government is massively increasing tourism investment, which means capacity across industry needs to grow.  Infrastructure takes a long time to deliver and the industry needs certainty to invest to ensure government investment is not undermined.

“We intend to continue to invest substantially in a new Domestic Terminal and a second runway which will deliver considerable on-going benefits to the travelling public. Auckland Airport delivers a world-class quality airport experience and our charges are designed to achieve a reasonable return on significant investments of essential long-term national infrastructure.”

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