Airport baulks at linking its shares with energy stocks

Auckland International Airport shares have become unfairly entangled with energy stocks amid growing investor fears about Government regulation, says the company's chief financial officer, Robert Sinclair.

Airport shares have fallen from $2.06 on August 8 - the day before the Commerce Commission declared its intent to take control of Vector's pricing - to close down 1c at $1.92 yesterday.

The airport today reports a half year that analysts are picking to be roughly in line with last year's $51.3 million.

Sinclair said lumping the airport in with energy stocks in relation to regulatory risk did not make sense.

One of the key differences was that the airport's major customers - on the regulated side of the business - were large airlines rather than individual consumers.

"These are substantial commercial organisations, in many cases much larger than Auckland airport.

"They have strong countervailing powers ... such as legal duress - there is obviously the threat of court action or judicial review."

Another was reputational duress "which we have seen in the press with their views on how we are behaving and so fourth".

Sinclair also mentioned financial duress "if they are not comfortable with the fees they are being charged - simply not paying them".

Last month, Air New Zealand chief financial officer Rob McDonald said he was "stunned and shocked" by new landing prices proposed by the airport.

McDonald argued that the airline had no real power in negotiations.

Stewart Milne, of the Board of Airline Representatives, said his organisation continued to lobby the Government for a regulatory change because the airlines had little other redress.

He said regulation was very light-handed. It required the airport consult on pricing but ultimately the wording of the legislation allowed prices to be applied "as they see fit".

The board was not in favour of a heavy-handed regulatory regime but there was an imbalance that needed redressing.

In 2002, a commission inquiry concluded that Auckland airport was extracting about $4 million a year in monopoly profits and recommended some form of regulatory control.