Auckland Airport proposed price increases ‘ridiculous’
Jetstar chief executive Stephanie Tully has branded the threat of increased charges at Auckland Airport as “ridiculous”.
The airport has been in a public stoush with Air New Zealand over the scale of development work, with the airline calling for an urgent inquiry into airport regulation.
Auckland Airport has proposed what Air New Zealand says is a $7 billion to $8 billion development over 10 years.
Air New Zealand chief executive Greg Foran said the costs associated with the redevelopment will end up being passed on to passengers, and that is something Tully agrees with.
“We fully support Air New Zealand in its positioning on this issue. We agree the airport needs some work but what’s proposed is completely overdone for what’s needed,” Tully told Stuff Travel.
“For Jetstar being a low-fares leader, it’s really important we keep our cost base low,
so we can keep offering low cost fares in that market. The design is not fit for purpose for us and for others. It’s completely overdone and we’ve said that directly to the airport and through the various submission processes so we really hope there’s some intervention now on how that can be worked out.
“We hate to think we’re not growing as fast as we’d like to because we have the threat of ridiculous airport costs.”
Tully called on the Government to intervene.
“You shouldn’t have things like this threatening travel. It’s not right for people and its not right for the consumer who will ultimately have to pay for it. [The airport] needs development but it doesn’t need that sort of size of development.”
Smaller airlines like Air Chathams have also raised concerns about the increased costs.
Chief operating officer Duane Emenysaid regional airlines face some of the steepest price rises over the price setting event 4 (PSE4) yet they get the least in return. He said the regional passenger charges (RPC) will see increases from $2.64 to $6.88 over the FY23-27 period, and landing charges for aircraft (less than six tonnes) will jump to $115.04 from $60.24.
“It equates to hundreds of thousands of dollars extra each year which we have to find or absorb.”
Auckland Airport has previously said it was wrong to say its infrastructure upgrade will make travel unaffordable and airlines protesting about airport regulation and investment is nothing new.
A spokesperson for the airport told Stuff
Travel that it is “getting on with building the gateway New Zealand needs and travellers deserve at Auckland Airport”.
“That includes replacing our nearly 60-year-old domestic terminal and providing 26% increased domestic processing capacity, enabling more choice and competition in the market for the benefit of Kiwi travellers.
“Qantas through its New Zealand lowcost carrier subsidiary, Jetstar, have long benefited from incredibly low domestic airline charges at Auckland Airport, which for many years have been 40-50% less than other comparable airports in New Zealand and Australia. Auckland Airport’s charges make up a fraction of the cost of an average airfare – just 3 to 5% – with prices rising just $1.76 each year.”
The spokesperson added that delayed airport investment “is not in the interests of New Zealand consumers”.
Commerce Minister Andrew Bayly said the Commerce Commission was reviewing Auckland Airport’s proposed charges and will issue a draft report in May.