Air firms’ fees ‘double whammy’
The Department of Conservation is seeking far better returns from its land and businesses are worried, reports Amanda Cropp.
The Department of Conservation is reaping almost $17m a year in concession fees from commercial operations on its land, and is promising closer scrutiny of payment dodgers.
DOC’s income from concessions has risen by more than $3m since 2013 and it expects to earn $20m in fees next year. This year’s total budget is $376m.
Director of planning, permissions and land Marie Long, said a new economics and pricing unit assessed concessions to ensure there was a fair market return.
‘‘In the past some of [the fees] have been incredibly low … We’re getting smarter in our negotiations.’’
There are currently 4478 commercial concessions, with the largest contributions coming from guiding, aviation, tourism occupations, and ski areas.
Concession fees were invested back on the conservation estate and were ‘‘not about making money for the sake of it,’’ said Long.
But there is some unrest over the department’s new aircraft landing fees which are being staggered over three years from July 1, as new concessions are granted and old ones come up for review.
Tourism Industry Aotearoa (TIA) advocate Rachael Moore, said the speed of their introduction was potentially ‘‘crippling’’ for some businesses who set their ticket prices 18 months in advance.
She said it was unfair on those operators whose concessions came up for review in the coming months and faced an immediate price rise.
‘‘It might look like aviation is pulling in a whole lot of money and is going gangbusters with glacier landings.
‘‘But the reality is there is not a large profit margin in that industry, and you have to consider who’s the market, and are they price sensitive or not?’’
Moore said after years of ‘‘running its house in a way that needed a bit of a tidy up’’, DOC had suddenly decided to charge ahead without properly considering the ramifications for businesses.
Southern Helicopters pays about $100,000 a year in concession fees and operations manager Lloyd Matheson, is also president of industry body Aviation New Zealand.
He is very unhappy about the lack of consultation over the changes.
‘‘We’re not complaining about the fees, but we want them to delay the first stage until we can adjust our prices.’’
Matheson said the DOC fee rises came on top on increases in Civil Aviation charges, so operators faced a ‘‘double whammy.’’
Long said out of about 200 aircraft operators, 20 were affected and they had been asked to ‘‘demonstrate that there’s an impact that they consider they cannot wear.’’
Matheson’s other gripe was that some operators were dodging concession fees by not logging landings.
Long said under most concessions, aircraft operators now had to provide GPS data on request so it could be compared with activity sheets.
‘‘We will be able to see whether the two forms of data are telling us the same story.’’