KEY POINTS:
Air New Zealand has told MPs proposed changes to the rules covering airport charges will cost consumers hundreds of millions of dollars in the next six years.
In select committee submissions, the airline says the Commerce Amendment Bill "astonishingly locks in today's monopoly pricing" by airports with certainty until 2012 and it was 2014 at the earliest before consumers were likely to see any benefit on pricing.
"Six months, not six years, needs to be the timeframe within which legislative reforms deliver efficient airport pricing," the airline's submission to the commerce select committee says.
Among planned changes, airport companies would find themselves more tightly regulated under the Commerce Act rather than the Airport Authorities Act.
Airlines have long complained existing rules give airports an unfair advantage in setting fees as they can simply impose them if negotiation fails.
Auckland Airport's chief executive, Don Huse, said after yesterday's hearing that he believed the regime worked well, there was extensive consultation and airlines could seek a judicial review of fees as Air New Zealand was doing now.
"We're saying if it ain't broke don't fix it, but if the Government does want to go there we'll engage very positively."
Wellington Airport's chief executive, Steven Fitzgerald, said there had been increased investment in Wellington and legal challenges to its fees had been successfully defended. He said the amendments had been foisted on the sector with no consultation as the Government grew concerned at possible takeovers of Auckland Airport.
The bill would in effect have the Commerce Commission setting the price through a very prescriptive methodology.
But Air New Zealand said price setting was far from prescriptive under the bill as drafted. "Input methodologies will in no way constrain airport pricing. It's farcical to commit commission resources over some two years to develop binding input methodologies for information disclosure but then fail to require all regulated companies to adhere to them for pricing purposes."
The bill also failed to remove the airports' statutory right to set prices.
"The Government's misguided belief in 1997 that consultation would constrain airport monopoly pricing has proven time and time again to be a costly delusion," the airline said.
Huse said another layer of regulation just added another layer of uncertainty.
"This was directed at the power companies, the consensus is that it is good for them - quite paradoxically for us ... [it's going to] create uncertainty."
DOGFIGHT
* Air NZ wants a credible regulatory threat over pricing to drive "appropriate" behaviour by airport companies.
* Auckland Airport wants amendments including no requirement for the Commerce Commission to report to ministers when airports set new prices and limiting regulation to aeronautical charges only.
