The best argument yet for the establishment of Whenuapai as a civil airport:
"Travellers hit under any owner
4:12PM Tuesday July 31, 2007
By Jim Eagles
First the good news: kindly Auckland International Airport is doing away with that irritating $25 departure charge imposed on people flying overseas. Hurrah.
Second the bad news: horrid foreign companies wants to take over the airport creating a risk of - as Greens co-leader Russel Norman put it - "monopoly rents" (i.e. the airport abusing its monopoly position by ripping off consumers). Gasp.
It's a straightforward, black and white situation, so surely all we need to do is keep the airport in local ownership and all will be well. Or will it? Look at the facts behind the headlines and you get a rather different picture.
Personally I've always thought the departure charge was a classic case of monopoly rent. If it didn't have a monopoly the airport company would never get away with charging passengers $25 a time for hanging around its high-priced shops and cafes.
It's like Westfield charging customers to enter its malls. And at my nearest mall, far from charging an entry fee they provide a couple of hours of free parking (park at the airport for 45 minutes for a coffee and a browse and it will cost you $6). So the departure charge should go.
But it turns out it is not being eliminated. All the airport is doing is transferring responsibility for making the payment from passengers to the airlines. And what do you suppose the airlines will do? Add it to the airfares of course.
What's more, when the new regime takes effect on July 1 next year, the charge will be split - half imposed on inward flights and half on outward flights - and it will go up 50c a leg, making the round trip cost $26.
And the airport says further increases of $1 a round trip are in the pipeline for each of the next three years, so before you know it you'll be forking out $29 a trip.
This is despite the fact that just two years ago - when the airlines agreed to meet aviation security costs, which previously took $5 of the departure charge - the airport blithely kept the charge at $25 and trousered a nice little bonus of $10 million a year.
In other words, by the time the signalled increases have taken effect, the airport company will have increased what it charges international passengers by 40 per cent in five years. And that's without allowing for extra income from passenger growth.
But wait, there's more. Last year the airport increased the terminal services charge to airlines by 23 per cent and that will go up again this year. It also says it will increase aircraft landing charges by 2.5 per cent a year for the next five years.
Add to that the constant increases in the airport's retail rents, taxi charges, parking fees and so on, and it's hard to avoid the impression that this is a monopoly which rather enjoys the absence of competition. (The company is so keen on the concept that it's decided to extend it to duty free shopping and give DFS Galleria a monopoly.)
London-based research company Transport Research Laboratory, which keeps track of airports' returns, found Auckland International Airport was the most profitable in the world in 2005. Last year it was second.
No wonder lots of foreigners want to buy the business. No wonder politicians are expressing concern about the opportunities for a foreign-owned monopoly to make excessive profits.
But surely abuse of a monopoly position is just as unacceptable whether it's being done by Arabs or Kiwis? And when the Commerce Commission investigated five years ago it concluded Auckland Airport was overcharging airlines by $4 million a year.
The commission asked the Minister of Commerce to impose price controls. But the minister decided that would do more harm than good.
The airlines maintain that since then the situation has got even worse. Earlier this year the Board of Airline Representatives in New Zealand asked the Commerce Commission to investigate airport charges again.
In addition, in April this year the Ministry of Economic Development launched an inquiry into whether regulatory control under the Commerce Act was proving effective in preventing monopoly providers - such as airports - from making excessive profits at the expense of consumers.
It's a good question, and one which is surely just as relevant no matter who owns the monopoly provider in question."
www.nzherald.co.nz/section/7/story.cfm?c_id=7&objectid=10454911&pnum=0
