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Wellington Airport keeps 2013 returns within regulator's guidelines, engages with carriers over fees

Thursday 11th July 2013

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Wellington International Airport, which was accused of price gouging by Air New Zealand, has kept its 2013 returns within the Commerce Commission's guidelines, and has started talking to airlines over future landing fees for carriers.

The transport hub which is co-owned by Infratil and Wellington City Council reported a return on aeronautical assets of 6.23 percent in the year ended March 31, under the regulator's 8 percent benchmark for a third year. In May it reported an 81 percent jump in profit to $16.2 on revenue of $106 million.

Earlier this year the regulator said Wellington Airport was likely to extract excessive profits between 2012 and 2017 in its information disclosure report to Commerce Minister Craig Foss and Transport Minister Gerry Brownlee. The airport and Commerce Commission have been at odds as to how that return is calculated.

"The Commerce Commission's recent review of Wellington Airport's performance noted that our current prices are in line with its acceptable range and this has always been the case," chief executive Steve Sanderson said in a statement.

The transport hub has previously been accused of price gouging in the setting of its air service charges, with national carrier Air New Zealand flagging a $200 million lift in landing fees over the coming five years.

Wellington Airport has kicked off talks with the airlines over plans to lift its average airline charge per passenger by 70 cents per year over the next three years from the current $11.59. The increase will cover airport developments, including expanding the main terminal.

Sanderson said the talks will ensure future prices will stay within the regulator's acceptable range.

Wellington Airport's NZX-listed bonds, which pay annual interest of 7.5 percent and mature in November, were unchanged at $102.213 per $100 face amount at a yield of 4.5 percent, according to NZX data.

Shares in Infratil fell 0.9 percent to $2.33.

BusinessDesk.co.nz



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