Air NZ caves in on airport charges but wins secret deal

By CHRIS DANIELS aviation reporter

Air New Zealand has run up the white flag in its long-running battle against increased landing charges at Wellington International Airport.

It was to start a legal challenge against the airport in the High Court at Wellington yesterday.

But instead, it has agreed to start paying the new fees, which were increased by 78 per cent in April.

In exchange for handing over the disputed money, which could be as much as $14 million, Air NZ has extracted secret concessions from the airport.

Air NZ has been charging passengers the new fees for eight months but has kept the money, refusing to pass it on to the airport.

Some passengers whose flights did not land at Wellington but flew over it were also charged the increased fees.

The dispute centres on what sort of return on investment the airport company should get from the $116 million it spent on a new terminal.

After yesterday's settlement, all the money so far kept by Air NZ will be given to the airport company.

Airline spokesman Glen Sowry said an arrangement with the airport had also been made that "if we achieve certain objectives, it will be more beneficial to the airline".

He would not elaborate on what that meant, and would not say why provisions of the deal were being kept confidential.

Airport chief executive John Sheridan would not say what the deal with Air NZ entailed, other than that it "was going to evolve over time".

He would not say if the airline, which accounts for between 65 per cent and 70 per cent of the airport's business, would now get special treatment over other airlines.

"From our perspective, it's all about working with Air New Zealand," he said.

Air NZ originally said that if it over-collected on the landing fees, it would not refund the over-charged passengers, but would instead use the money to promote Wellington as a tourist destination.

Air NZ was collecting and keeping around $1 million a month while it was fighting the airport's charges.

Domestic jet passengers are being charged an extra $6 on each ticket. Those flying on smaller aircraft pay $4 extra.

Investment company Infratil, which owns 66 per cent of the airport, says the charge increase amounts to an average of $4 for each passenger.