Conclusion
8.251 In this Chapter, the Commission considered the extent of competition in the supply of airfield services at Auckland International Airport. It found that the relevant market was one in which AIAL was by far the major supplier, faced little prospect of new competitors entering the market, and was not sufficiently constrained by the countervailing power of the airlines, and hence was one where competition was limited. The Commission applied its generic principles developed earlier in this report to calculate the appropriate asset base and WACC for AIAL. It then considered the returns that AIAL had made in the recent past, and the returns it was projected to make in future years, against target returns for those years based on realised or forecast demand and other costs. It also assessed the efficiency implications of control.
8.252 A critical assumption made by the Commission is that the costs of control would be borne by acquirers rather than the general public. The Commission has found a net benefit to acquirers, despite having netted-off all of the costs of control from the benefits to acquirers. The Commission, therefore, considers that on the balance of probabilities it is necessary or desirable for the airfield activities supplied by AIAL to be controlled in the interests of acquirers.
8.253 The Commission finds that the thresholds contained in section 52 of the Commerce Act are satisfied in the case of the airfield activities supplied by AIAL to aircraft operators, and that the airfield activities supplied by AIAL may be controlled. The Commission's consideration of whether or not the Minister should control the airfield activities supplied by AIAL is contained in Chapter 11.
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