Group Calls For Official Inquiry

When Wellington International Airport in Wellington, New Zealand, announced it was increasing its landing charges, its airlines immediately cried foul.

The Board of Airline Representatives New Zealand (BARNZ), an organization that represents international airlines has requested the New Zealand Commerce Commission, the enforcement arm of New Zealand commerce, to conduct an official inquiry into the increases.

Some of the airlines at WLG include Air New Zealand, Qantas, Sounds Air, Pacific Blue and Freedom Air.

WLG is raising its landing charges by up to 2.85 percent a year for the next five years, according to the Australian Associated Press. That translates to about 30 Australian cents per passenger per year. The airport said it will be continuing with upgrades and improvements estimated at more than $46.5 million during the next two years.

"These investments in safety and growth are absolutely necessary for Wellington Airport to comply with international safety standards, and to cope with current and forecast levels of international air travel in Wellington. They also deliver more pleasant facilities for customers in international lounges, an area that was not properly addressed in the last terminal upgrade," the airport said.

But, the airlines say WLG has set its new fees higher than necessary. According to recent financial disclosures, the airport is over-recovering through the existing charges.

"On the basis of the value of their assets and treating revaluations properly, which Wellington has not done, then they are currently over-recovering -- getting more revenue from airlines and passengers than they are entitled to," BARNZ executive director Stewart Milne said.

According to the AAP, the difference between what the airport should be charging and what it is asking for is $18 million a year. Milne contends the airport is using a monopoly status to impose the unwarranted fee hikes on carriers.

WLG said it decided on the fee increase after "extensive consultation" with major airlines. The airport contends "compromises were made and common ground reached" on many issues during the talks.

"That is not to say that there is agreement on all matters, or that airlines will welcome any price increase, albeit small," the airport said.

"Revenue from the increased charges will contribute to funding the investment program of aeronautical projects already complete or underway worth over $40 million, the third stage of its international terminal upgrade and expansion, worth another $39 million, and the Northern Runway End Safety Area ($7.5 million)," the airport further stated.

"The result would be better facilities for passengers, a safer airfield and greater capacity to grow the Wellington market."

"We are very confident that this package is in the best interests of traveling customers and airlines who wish to grow the market", said Simon Draper, Wellington Airport Chief Executive Officer. "The bottom line is quite simple: we are delivering much better airport facilities with very minor price increases".

FMI: www.wellington-airport.co.nz, www.comcom.govt.nz