Air Transport

Jetstar is fighting a move by New Zealand's CAA to close a loophole that allows the carrier's domestic services in the country to avoid paying a passenger levy.

The Australian carrier has avoided the levy as it operates domestic services in New Zealand under an Australian air operator's certificate, instead of a New Zealand AOC. This is because of a reciprocal agreement between the Australian and New Zealand governments.

A proposal has gone to the New Zealand transport minister, who has to approve the CAA's plan to charge Jetstar a reduced levy. The NZ$2 ($1.50) levy per passenger that New Zealand domestic operators pay covers infrastructure costs, says a CAA spokesman.

Jetstar, however, objects to the CAA's proposal to charge it 83% of the levy. Australia's Civil Aviation Safety Authority (CASA) is responsible for the oversight of Jetstar's operations and this involves audits, inspections, certifications, assessments and approvals for the carrier's operations in New Zealand, it says. CASA already charges Jetstar for this, it adds.

"We believe a more equitable path forward would be for each regulator to recover costs from each other for any services they provide to each other," says Jetstar. "This would remove duplication and ensure we maintain an alignment between the charges and the regulator with responsibility for an airline."