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Consultation


Regulatory Impact Statement: Commerce Act Review - Airports

Hon Annette King, Minister of Transport and Hon Lianne Dalziel, Minister of Commerce
[ Last Updated 22 November 2007 ]


41. Major airports and the airline sector were active in making submissions on the review of the regulatory control provisions in the Commerce Act, and specifically highlighted issues with the regulatory regime for airports. Submissions were received from Air New Zealand, Auckland International Airports Limited, the Board of Airline Representatives in New Zealand (BARNZ), Christchurch International Airport Ltd, the International Air Transport Association (IATA), Peet Aviation, Virgin Blue and Wellington Airport Limited (WIAL).

42. After meetings during consultation with AIAL, WIAL, BARNZ and Air New Zealand, these parties further submitted on questions posed, and on possible options for regulatory change.

43. Major airports (AIAL, WIAL and CIAL) maintain that the current regulatory regime is largely satisfactory. They say that consultation requirements are taken seriously with airports making adjustments to their proposals (both in terms of input methodologies, proposed capital expenditure and charges) as part of this. Judicial review also provides a check on consultation processes. They also state that they take the threat of price control under the Commerce Act very seriously, and that their prices are not excessive and that their charges are generally mid range compared to international airports overseas.29

44. The airlines (BARNZ, Air Zealand, Virgin Blue) and IATA, on the other hand, argue that New Zealand's regulatory regime lacks credibility. They argue that the information disclosure regime lacks rigour and value because there are no guidelines or methodology specified and the consultation process is unsatisfactory. The absence of guidelines or binding input methodologies is a major source of dispute and means that consultation processes are time-consuming and costly. The statutory power for airports to set charges as they see fit appears to be unique and as a result of the regime's current design, the airports can and do make unilateral decisions on investments and set charges as they see fit.

29 Airports also claim that some airlines, and in particular Air New Zealand, oppose investments in new facilities required to attract new entry by competing airlines and that this is to the detriment of the travelling public. Airports have also expressed the view that the ability to set charges as they see fit provide a "circuit breaker" when it does not prove possible to reach agreement. This enables the airports to get on and make investments.


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