Airports Association wants regulator to probe Air NZ charges 28 Aug 2014
Related articles
- NZ consumers grow more upbeat, may resume spending Business
- Minister launches SmartGate in Wellington Travel
- Brownlee Leads Aviation Mission To Shanghai News
- Trams to make a comeback on Auckland’s streets News
- Knowles quits as CEO of KiwiBank Business
- NZ migration bolstered by British invasion Migration
- NZ manufacturing activity reaches highest since 04 Business
- NZ dollar hits 22-month high vs euro Business
- OceanaGold finds new gold deposits at Fraser mine Business
- Transpower gets go-ahead for $170m SI upgrade Business
Airports Association wants Commerce Commission to inspect Air NZ's regional fares
By Suze Metherell
Aug. 28 (BusinessDesk) - The New Zealand Airports Association has called on the Commerce Commission to regulate Air New Zealand's regional fares, where the national carrier has an effective monopoly.
The Auckland-based airline yesterday announced a 45 percent uplift in annual profit to $262 million, its third consecutive year of earnings growth. Domestic routes between the major centres, such as Auckland, Wellington and Christchurch, are often discounted, but the NZ Airports Association says regions are right to question whether provincial routes are generating excessive profits.
"There are big question marks around Air New Zealand's monopoly domestic routes where there is potential for excessive profits, and no transparency or monitoring," said Airports Association chief executive Kevin Ward. "The Commerce Commission could be directed by the government to include monopoly regional airlines in an information disclosure regime. That would be the best way to assure New Zealanders that Air New Zealand's prices are fair."
Airports charge airlines a landing fee, and have an interest in keeping airfares low to boost traveller numbers through their gates. Last year outgoing Air NZ head Rob Fyfe accused Wellington International Airport of price gouging and flagged a $200 million lift in landing fees over the coming five years, which he said in turn forces the airline to lift airfares. Airports fall under Commerce Commission regulation, as they're considered to have an effective monopoly and are required to disclose financial statements and business plans, as well as keeping returns under 8 percent to limit excessive profits.
In the 2014 financial year, Air NZ increased passenger numbers 2.3 percent to 13.72 million, with a 1.2 percent lift in revenue passenger kilometres to 14.85 million, while short-haul yields improved 0.3 percent to 17.1 cents per RPK. JetStar Airways, Qantas's discount airline, had made inroads into New Zealand's domestic market since launching in 2009, reporting a 22.4 percent market share at June 30 last year, but has since quit its Wellington-Queenstown route, as its Australian parent comes under increasing pressure.
“The virtual monopoly they have in a lot of domestic routes does certainly benefit Air New Zealand," said Grant Williamson, director at Hamilton Hindin Greene. “You do question whether there’s going to be any backlash at some stage in the future on some of those routes as you do see a few media reports.”
Shares of Air NZ extended yesterday gain, rising 2.1 percent to a two-month high of $2.22. The shares have climbed 3 percent this year, outpacing an 11 percent gain in the NZX 50 Index over the same period. The stock is rated an average 'buy' based on six analyst recommendations compiled by Reuters, with a median target price of $2.30.
Last year the government reduced its stake in the airline to 52 percent, from a previous three quarter stake.
(BusinessDesk)
News
Hilary Timmins' Award-Winning UK Documentary Series To Inspire NZ Students
29 Jun 2020 Education
Dream Catchers, produced and directed by Hilary Timmins, celebrates the success stories of more than thirty inspirational New... more
New Zealand reaffirms support for Flight MH17 judicial process
7 Mar 2020 News
Ahead of the start of the criminal trial in the Netherlands on 9 March, Foreign Minister Winston Peters has reaffirmed the need to... more
Business
NZ Government's Economic package to fight COVID-19
17 Mar 2020 Business News
The Coalition Government has launched the most significant peace-time economic plan in modern New Zealand history to cushion the... more
NZ Government announces aviation relief package
19 Mar 2020 Business News
Transport Minister Phil Twyford today outlined the first tranche of the $600 million aviation sector relief package announced earlier... more
Living
Diversity was Key at New Zealand Trade Tasting in London
6 Jun 2022 Food & Wine
New Zealand Winegrowers Annual Trade Tasting was recently held in London, on Wednesday 4 May, in Lindley Hall.
It was the first... more
Kiwi author stuns Behind the Butterfly Gate
12 Jan 2022 Arts
Hidden behind the Butterfly Gate is where the secret has been kept for 76 years...
New Zealand writer Merryn Corcoran’s... more
Property
Fairer rules for tenants and landlords
17 Nov 2019 Property
17 NOVEMBER 2019
The Government has delivered on its promise to the over one million New Zealanders who now rent to make it fairer... more
New Zealand Government will not implement a Capital Gains Tax
17 Apr 2019 Property
The Coalition Government will not proceed with the Tax Working Group’s recommendation for a capital gains tax, Jacinda Ardern... more
Migration
Boosting border security with electronic travel authority – now over 500,000 issued
19 Nov 2019 Migration
19 NOVEMBER 2019
We’ve improved border security with the NZeTA, New Zealand Electronic Travel Authority, which helps us to... more
Christchurch reinstated as refugee settlement location
18 Aug 2018 Migration
18 AUGUST 2018
HON IAIN LEES-GALLOWAY
The announcement that Christchurch can once again be a settlement location for refugees... more
Travel
Gallipoli Anzac Day services cancelled
19 Mar 2020 Travel & Tourism
The New Zealand and Australian Governments have announced this year’s joint Anzac Day services at Gallipoli will be cancelled... more
New Zealanders advised not to travel overseas
19 Mar 2020 Travel & Tourism
New Zealanders advised not to travel overseas
more
Sport
The Skipper's Diary: Sir Richard Hadlee honouring his father and NZ's Forty-Niners
27 Oct 2019 Cricket
NZNewsUK London Editor Charlotte Everett spoke to Sir Richard Hadlee about why he’s chosen to publish his father’s... more
PREVIEW: All Blacks v England semi-final
26 Oct 2019 Rugby
The two most convincing quarterfinals winners are set to square off in a semifinal showdown for the ages when the All Blacks meet old... more
Columns
Gordon Campbell on the Gareth Morgan crusade
11 Nov 2016 Opinion
Gordon Campbell on the Gareth Morgan crusade
First published on Werewolf
The ghastly likes of Marine Le Pen in France and Geert ... more
Gordon Campbell on the US election outcome
10 Nov 2016 Opinion
Column - Gordon Campbell
Gordon Campbell on the US election outcome
Well um.. on the bright side, there (probably)... more
Kiwi Success
Congratulations to Loder Cup winner
26 Sep 2018 People
25 SEPTEMBER 2018
The Loder Cup, one of New Zealand’s oldest conservation awards, has been awarded to Robert McGowan for 2018... more
Appointments to New Zealand National Commission for UNESCO
16 Aug 2018 Appointments
16 AUGUST 2018Appointments to New Zealand National Commission for UNESCO
HON JENNY SALESA
Associate Education Minister Jenny Salesa is... more
Recruitment
Historic pay equity settlement for education support workers
14 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more
Historic pay equity settlement for education support workers
22 Aug 2018 Recruitment
14 AUGUST 2018Historic pay equity settlement for education support workers
RT HON JACINDA ARDERN
HON CHRIS HIPKINS
Prime Minister
The... more