Auckland Airport to mull reducing charges after final commerce commission feedback (updated)

Auckland International Airport

16/07/2024 22:23

(Updates with details and background)
       July 17 (Reuters) - Auckland International Airport
 AIA.NZ  said on Wednesday it will consider cutting charges for
airlines using its terminals after a final report by New
Zealand's commerce minister. 
    A draft from Commerce Commission indicated that Auckland
Airport is targeting a weighted average cost of capital (WACC)
that is higher than what it considers to be reasonable, but saw
the company's planned capital expenditure as reasonable.
    The commission relied on updated methodologies in its price
setting assessment, which were released after the company had
already set prices, Auckland Airport said.
        "At the time of our price setting the commission's
methodology did not contemplate the impacts of the global
pandemic on aviation. Our pricing decision took this into
account and the Commission recognised that there were legitimate
reasons for doing this," CEO Carrie Hurihanganui said.
        The changes to pricing would be effective from start of
July next year and will be applicable till June 2027, the
company added.
    The country's flagship carrier Air New Zealand  AIR.NZ 
earlier this year lodged an official request with the minister,
Andrew Bayly, to look at government regulation and if it was fit
for the airport to raise charges.
    Air New Zealand did not immediately respond to a Reuters
request for comment on Wednesday.

 (Reporting by Ayushman Ojha; Editing by Alan Barona and
Shailesh Kuber)
 ((Ayushman.Ojha@thomsonreuters.com;))