The state-owned enterprise has said its price proposal reflected underlying costs.
This week, it said it would grant an extension for feedback. It had already received 11 submissions.
Airports
Christchurch Airport said apart from facing rising levies, domestic travel demand was poor across some segments.
“Airways’ view of likely future passenger growth in the pricing period is optimistic,” the airport’s chief strategy and stakeholder officer, Michael Singleton, wrote in the airport’s submission.
He said a major sector-wide effort would be needed to get 4% annual growth at a time of tight aircraft seat capacity.
“Airways should consider this carefully. If it has overestimated the likely growth rate, it will under-recover during the pricing period.”
Queenstown Airport raised specific concerns about having enough air traffic controllers. Photo / Michael Thomas
Queenstown Airport was concerned about not having enough air traffic controllers.
It said Airways assumed there’d be no increase in the number of fulltime air traffic controller jobs to 2028.
The airport was expecting big growth, with a parallel taxiway to be constructed.
“This development is crucial to improve the operational efficiency and capacity of the existing runway and airfield, enhance safety and sustainability, and reduce ground delays,” said Melissa Brook, the airport’s general manager for strategy.
She said it was likely Airways would have to start managing ground movements at the airport.
That was beyond the current level of service provided by Airways at Queenstown Airport and meant more resources would be needed, Brook said.
Hamilton Airport said Airways had unrealistic revenue expectations.
It said Airways’ proposed target revenue for 2028 was $332.7 million, compared to $183.1m proposed in 2023.
“Setting aside your rationale, this far exceeds any market inflation indices for the same period, further noting Airways is not actually proposing any fundamental change in levels of services such as numbers of towers operated.”
The airport said Airways should “provide a lower-cost solution to customers”.
The airport was focused on the return of international flights.
Hamilton Airport pointed out Airways was selling airfield power and lighting equipment (APLE).
“As Airways completes an APLE transfer to an airport, its pricing benefits from reduced operating costs, reduced capital base and savings in future investments needed.”
The NZ Airports Association said it was concerned about the proposed price increases.
Airways has said the price hike equated to a per seat increase of between 79c and $2.80 for commercial flights, depending on the aircraft capacity.
The Airports Association said that might seem small but the cumulative effect of all cost increases on passengers would be significant.
The Airports Association’s chief executive, Billie Moore, questioned if Airways should still pay a dividend to the Crown.
Airlines
Air New Zealand said Airways should prioritise “absolute must-haves rather than nice-to-haves”.
The airline said Airways should review its proposed capital plan and it queried a proposed $17.6m expenditure on airspace architecture.
It suggested alternative funding methods be explored.
Singapore Airlines said the incremental charges could lead to it having to pay $510,000 more in the 2026 financial year alone.
“The front-loaded structure of these increases remains a key concern, particularly in light of expected continued growth in passenger volumes, which should naturally broaden the cost base if the cost recovery is timed more gradually.”
Singapore Airlines said Airways should try phasing any spending in more evenly over the next three years.
Qantas said a fully digital option could replace the current Auckland air traffic control tower, which was built in the mid-1960s.
Airways last month confirmed a decision to proceed with the next stage of assessment for a physical tower.
The current tower is on land set for redevelopment. A new 45m-high tower costing an estimated $40.6m has become Airways’ favoured option.
Qantas in its submission also said it was concerned some developments at Airways might “reflect a reversal of previous cost-saving initiatives and a return to pre-Covid baselines”.
Airline groups
The Aviation Industry Association (AIANZ) said four weeks for submissions was not good enough.
It said Airways played a vital role but the industry was facing serious challenges.
“The agricultural aviators are enduring a difficult trading period not experienced for some decades, flight training organisations have not seen student numbers recover to anywhere near 2019 levels and tourism has not got back to where it was pre-pandemic.”
“If the Airways increases go ahead as planned, the sustainability of aviation operators will be threatened further,” the AIANZ said.
It said Airways’ forecast cost increases were excessive and Airways was trying to justify a bigger salary bill when many other public sector agencies were asked to make cutbacks.
The Board of Airline Representatives (Barnz) said New Zealand was becoming an increasingly expensive destination to get to.
But Barnz suggested it was unfair to blame Airways because the sector already had issues with price increases imposed by the CAA and “excess profit-taking” by Auckland Airport.
Barnz represented 25 airlines as well as ground handlers, catering companies and waste management businesses working with airlines.
It said price changes for general aviation pricing seemed arbitrary.
For general aviation, Airways proposed a 6.8% increase for the 2026 financial year and a cumulative 10.5% price over the three years to July 2028.
The International Air Transport Association (IATA) said New Zealand was “alarmingly evolving into a very expensive and unaffordable destination”, especially for international passengers and tourists.
The IATA said Airways should revisit the price proposal and propose alternative options.
Airways NZ told the Herald the timing for submissions was in line with past pricing consultations.
“We extended the initial submission period to allow for additional feedback and have notified customers ... that we are extending the period for responses.”
On Wednesday, it said Airways carried out further analysis on its proposed pricing approach and would provide a new closing date to customers shortly.
“We will confirm the revised timeline when we share the information with stakeholders to ensure everyone has sufficient time to provide informed feedback.”
