DAVID KNIBB SEATTLE
Australia and New Zealand may be heading in opposite directions on airport price controls.
Except for Sydney, all major airports in both countries are privately operated under long-term leases. New Zealand requires airports to consult with airlines before raising fees, but does not regulate those fees. Its Commerce Commission is now reviewing this position. It seems willing to leave most airports alone, but has concluded in a draft report that controls are needed at Auckland airport. The final report is due in November.
Australia already regulates airport fees, but its Productivity Commission, a government advisory group, now claims they should be replaced with a system that simply monitors fees. The commission claims this will "promote commercial relationships between airport operators and airlines". Its final report is due in December.
The board representing airlines in Australia accuses the commission of being "simplistic" and of accepting without analysis airport complaints that fees are too low to support investment in new runways and terminals. The airlines dispute that claim.
The Australian Competition and Consumer Commission, which now regulates airport fees, warns that removing controls would bring "very large increase in airport prices" and more disputes between airlines and airports.
Airlines also claim Canberra is playing games to promote the sale of Sydney airport, which will be finalised in the coming months. The Productivity Commission draft report came out just as Canberra announced it would decide soon on a winning bidder. The airlines argue that the prospect of removing price controls would itself boost the bids for Sydney airport.
Source: Airline Business