Airports in for dogfight on fees

By DANIEL RIORDAN

Airlines have taken their grievances over Auckland International Airport's higher landing and passenger departure charges to the Commerce Commission, accusing the airport of price gouging and monopolistic behaviour.

They say they are also concerned that other airports, including Christchurch, might follow Auckland's lead.

Last month, Auckland increased its landing charges by 8.5 per cent for this financial year (to June 2001), and by 5 per cent for each of the following two years.

It said the increases, based on asset revaluation, were justified under the Airport Authorities Amendment Act, which allows airports to review their charges every three years. They took effect this month. At the same time, the airport raised its international departure fee $2 a passenger.

Stewart Milne, executive director of the Board of Airline Representatives, said that after 12 months of consultation with the airport, the board still did not know which aspects of its submissions on the charges the airport accepted and which it rejected.

A commission spokesman said the consumer watchdog did not have the powers to investigate the complaint separately, but would include it in its long-term review into whether the airport's monopoly meant price controls were needed.

That review, established by the National Government in 1998 but then put on hold, is due to be completed by August 2002.

Mr Milne accepted that the commission was limited in its ability to investigate the airlines' complaint, but said the airlines would not be letting the matter go.

They will be billed this month for the higher landing charges. They will have to pay and hope that if the commission rules in their favour, the airport will have to reimburse them.

The airlines are also talking to Christchurch International Airport about its fees, working under the same structure as the Auckland talks. Mr Milne said matters were at "a pretty critical stage."

Asked if the consultation with Christchurch would develop into a similar situation to Auckland, Mr Milne said: "I like to be optimistic, but it's quite possible."

Christchurch company secretary Ian Walker said talks with the airlines were close to fruition, and would probably be completed by next month. He would not comment on what the outcome might be, although an industry source said the increases being discussed were lower than Auckland's.

Mr Milne said regional airports were also starting to put in claims for increases.

But there is some respite for the airlines. At the country's domestic hub, Wellington International Airport, an agreement on landing charges was reached several years ago and does not expire till June 2002.

Mr Milne said smaller airlines, which operated on thinner margins than their bigger counterparts, would suffer most.

John Whitehead, New Zealand manager for Aircalin (the former Air Caledonia International), said the airlines had expected charges to be lowered and had not budgeted for the higher fees.

Auckland was the most expensive of the airline's destinations.