After a review found it was targeting excessive profits, the Commerce Commission has confirmed Wellington International Airport Limited’s (WIAL) revised landing fees now fall within an acceptable range.
The Commission says that consumers using the airport will now be $33 million better off over a three year period.
Jointly owned by Infratil, and Wellington City Council the airport company revised its landing fees after the Commission reviewed its performance under section 56G of the Commerce Act in 2013.
Wellington, Auckland and Christchurch airports are subject to information disclosure regulation under the Act. The Commission reviews the airports’ pricing decisions in its summary and analysis capacity.
The Commission’s analysis estimates WIAL has set its prices targeting a return of 8.4%, which is just within the upper limit of an acceptable range of 7.4% to 8.4%.
Deputy Commissioner Sue Begg says WIAL’s response to the Commission’s section 56G report has been positive.
“Wellington Airport’s response to our report and its willingness to engage with us through information disclosure regulation has been very positive,” she says.
“We estimate that consumers will now be $33 million better off over a three year period as a result of this process.”
The disclosure of information about the price setting event in 2014 is the third of its kind for WIAL since information disclosure requirements were set under Part 4. The first price-setting event was in 2006, with the second in 2011. The Commission undertook a review of the effectiveness of the information disclosure regime in 2013.
The final report does not include any analysis of the proposed $300 million runway extension, as WIAL did not include it in the price setting event for the period from 1 June 2014 to 31 March 2019. The Commission does not regulate the prices the three airports charge. Airports may set prices as they see fit, but they must consult with customers on any major capital expenditure that will impact future prices.
The Commission’s ongoing role is to provide summary and analysis of the performance of the three airports. Any future decisions on airport regulation lie with Ministers.
