NZ airports group lauds Auckland report

The New Zealand Airports Association says the Commerce Commission’s final report on Auckland Airport’s charges shows how effective regulation helps deliver essential infrastructure investment – and offers clear lessons for the government’s competition and infrastructure agenda. The Commission has confirmed that Auckland Airport’s infrastructure build is appropriate and has followed a rigorous process. “The report shows the regulatory system working as it should – putting major investment under scrutiny, providing transparency, and prompting adjustments where needed,” says NZ Airports Chief Executive Billie Moore. “Auckland Airport said it would adjust its charges if the Commission recommended it, and has done so immediately. The airport has confirmed that its new target return is within the range the Commission considers reasonable. The Commission has welcomed this and confirmed this means there is no overcharging. That’s exactly how good regulation should work.” Moore said the outcome reflects exactly what the government has been calling for across infrastructure sectors. “Over the past month, we’ve heard a clear message from Government about the need for greater infrastructure investment. We agree. This report is a case study in how to get that investment: a clear process, a major investor at the table, and a stable regulatory system that supports delivery while ensuring accountability on price and quality. The airport is doing exactly what New Zealand says it wants – planning and actually delivering major upgrades to core infrastructure. It’s the kind of investment New Zealanders are calling for in transport, water and energy.” Moore said the report also has direct relevance for the government’s renewed focus on competition – especially in sectors where market power is concentrated. “Good regulation in monopolistic or oligopolistic markets improves business performance and delivers better outcomes for consumers. That’s exactly what we’re seeing in the airports sector – consultation, disclosure, price adjustments, and investment in new capacity. But when monopolistic conditions go unregulated, as we’re seeing in the domestic airline market, prices rise, service suffers, and consumers are left with fewer choices. Frankly, everything the government said about the grocery sector yesterday – high prices, limited competition, and the need for a strong new player – applies even more to the domestic airline market. If the government is serious about lifting investment and performance across the economy, it should back the frameworks that are working – and take a closer look at the sectors where clearly they’re not.” The report is the Commission’s final assessment of Auckland Airport’s Fourth Price Setting Event (PSE4), covering the period 1 July 2022 to 30 June 2027. It is available here. The Commission reviewed Auckland Airport’s aeronautical pricing, expected returns, and major infrastructure investment plans to assess whether they are consistent with the purpose of Part 4 of the Commerce Act 1986. The Commission found Auckland Airport’s $6.6 billion investment plan (2022–2032), including the $3.9 billion Terminal Integration Programme, was appropriate and had been developed through a robust and transparent process. The $2.1 billion new domestic terminal is justified based on capacity constraints, service quality, and expected demand growth. The Commission found Auckland Airport’s originally targeted post-tax WACC of 8.73% to be too high. It considered a range of 7.28% to 7.82% to be more reasonable. Auckland Airport has reduced its airline charges from 1 July 2025 to align with the Commission’s recommended return of 7.82%. The Commission noted that Auckland Airport’s reported returns for the first two years of PSE4 (2022–2024) were 5.53% – well below target due to lower traffic volumes. The Commission has found that that the regulatory regime is cost-effective and functioning; there is no evidence of systemic failure in the process; and highlighted that airports have responded to its findings. For Editorial Inquiries Contact: Editor Matt Driskill at [email protected] For Advertising Inquiries Contact: Head of Sales Kay Rolland at [email protected]