28 Mar 2012

Air NZ blames Dunedin landing fee for price rise

6:01 pm on 28 March 2012

Air New Zealand is raising ticket prices to Dunedin by $3 to $4 per passenger on Friday because of what it calls an unjustifiable rise in landing fees.

The South Island city's airport company raised its fees by 78% in December last year and Air New Zealand says it can no longer absorb this cost.

Dunedin says it has not raised fees since 2001, but Air New Zealand says this annualises out at 7% - way above inflation - and should not be tolerated.

It says the rising cost of landing aircraft at Dunedin Airport is matched by similar problems at other cities.

General manager for Australasian operations Glen Sowry says it can no longer absorb this cost and that a requirement for airports to consult does not work.

Meanwhile, an airport umbrella group says Air New Zealand is simply trying to keep more money for itself in campaigning against the 78% in landing fees imposed by Dunedin Airport.

Kevin Ward, chief executive of the lobby group for the country's 31 airports, accuses the airline of launching a campaign to suit its pocket.

He says the money kept by Air New Zealand will be money that is not available for airport development.

Financial pressures

Dunedin Airport has just pulled out of a long series of financial losses. It is half owned by the state and half by Dunedin City Council which is weighed down with debt.

Air New Zealand is also financially pressed, with earnings falling 71% in its latest six-monthly report.

Wellington Airport also plans to raise its landing fees by 54% this year. It last increased landing fees in 2003 by 78%.

Airports, which are natural monopolies, are being monitored by the Commerce Commission. However, some airlines think this is not enough.