KEY POINTS:
Air New Zealand has launched an extraordinary attack on plans to fast-track the "gold-plated" upgrade of Auckland's international airport, claiming the "ill-conceived" expansion will increase airfares.
In the firing line is Auckland International Airport Ltd (AIAL), which has been accused of abusing its monopoly status by continuing with the $180 million terminal upgrade with little regard for the impact it will have on airfares.
"Auckland International Airport is fast becoming a monument to AIAL's greed and continued abuse of the travelling public," Air New Zealand deputy chief executive Norm Thompson said.
Airport chief executive Don Huse confirmed the expansion would be paid for through existing terminal charges and a rise in airport levies, and said he wasn't surprised that Air New Zealand was complaining. But it failed to take into account that the expansion was essential if the airport was going to address passenger congestion.
Industry insiders say the upgrade will inevitably lead to higher airfares, predicting a standard economy ticket to Australia could rise by around $40 to cover the airport upgrade and departure fees which will be levied against airlines from July next year.
Huse said he was "enormously conscious" of the impact the expansion plans would have on airfares, but was also aware that many passengers were tired of long queues.
The upgrade, which has been brought forward by 18 months to ensure it is completed before the 2011 Rugby World Cup, includes a larger terminal, more shops, faster arrivals procedures and a new access pier with views of Manukau Harbour.
The plan has already been attacked by the Board of Airline Representatives, which warned passengers last week they would have to pay for the extensions.
Thompson claimed the current facilities - including the present expansion of passenger processing areas - were more than adequate to deal with the increased passenger numbers in 2011.
"All this at a time when air travellers are clearly signalling they want every effort made to keep the cost of travel down," Thompson said.
"AIAL knows that there is no requirement for this expansion prior to the 2011 Rugby World Cup.
"With current facilities, including the present expansion of processing areas, Rugby World Cup 2011 visitors will more than adequately be accommodated within the existing infrastructure and the extensions currently under construction."
Huse rejected that interpretation, saying the upgrade was critical, especially given the projected rise in passengers between the peak tourism period of November to April.
But Thompson described the upgrade as a "gold-plated" and "costly" solution to a non-existent problem.
"The board and management of the airport has lost its bearings as far as listening to the needs of customers," he said.
"This behaviour clearly demonstrates why the current regulatory environment needs to change to prevent monopoly abuse where customers travelling today have to pay for gold-plated solutions as well as redundant assets.
"It's hard to imagine a business facing competition, or taking the interests of its major customers into account, behaving in this way."
