Landing charges to rise despite threat

By DANIEL RIORDAN

Auckland Airport is going ahead with raising its landing charges from September 1 despite a threat from the Government that the higher charges may have to be revoked.

The Commerce Commission ruled in a preliminary report last month that Auckland had overvalued its assets and was generating too high a return on them.

The watchdog recommended Government price controls.

If that happens, Auckland Airport could have to forgo income of $16 million in the three years to June 2003, according to the commission's estimates.

The commission found Christchurch was also generating excess returns but said the cost of imposing price controls meant it would be counterproductive to apply them.

Wellington Airport gained a clean bill of health.

Auckland Airport managing director John Goulter criticised the report on its release and emphasised his misgivings yesterday.

He said his firm's submission to the commission - publicly available today - "illustrated a number of fundamental errors in the commission's workings which, when corrected, removed any suggestion of a need for price control".

In addition, Auckland disagreed with much of the commission's economic rationale, particularly its exclusion of land held for the second runway and the use of a historical cost base to value runways.

Mr Goulter said even using the commission's economic principles, the company's projected returns are below the commission's target rate.

Auckland is increasing its landing charges 5 per cent from September, having raised them 8.5 per cent last September.

It plans to hike them a further 5 per cent from September next year.

Submissions on the commission's preliminary report closed on Tuesday, and commission spokeswoman Jackie Maitland said 15 parties had responded.

Discussions with the parties involved will take place next month and the commission aims to report to Commerce Minister Paul Swain by November 2.

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