Auckland airport cuts passenger charges after watchdog’s criticism

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(Reuters) – New Zealand’s Auckland International Airport said on Monday it will cut airline passenger charges after the country’s competition watchdog said the airport operator was overcharging airlines and travellers.

Auckland Airport will discount per passenger airline charges by around 11% on average for regional, domestic jet and international travel, according to Reuters calculations from its statement.

New Zealand’s Commerce Commission said in its report the airport operator’s passenger charges were reaping an excess profit of about NZ$190 million ($108.34 million).

The excess profit represented a return of 8.73% from priced aeronautical activities such as aircraft landing and passenger terminal charges compared to the Commission’s estimated reasonable return of between 7.3% and 7.8%, the report said.

The conclusions were largely in line with the regulator’s initial findings in July last year

While the regulator found the company’s forecast revenue and targeted returns were excessive and unreasonably high, it said the airport operator’s planned investment fell within a reasonable range.

Commissioner Vhari McWha said the price increases were higher than what was needed to fund investment to build more resilient infrastructure and add additional capacity.

The Auckland Airport redevelopment plan includes a new domestic terminal and domestic airfield expansion, expansion of the international terminals and a new ground transport hub.

($1=NZ$1.7538)

(Reporting by Sherin Sunny in Bengaluru; Editing by Sonali Paul)