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Auckland Airport says criticism over fee charges is a perennial issue that surfaces every five years when airports change their prices. (file image)
Photo: RNZ / Emma Stanford
Auckland Airport is brushing off claims from airlines over its hiking of fees, saying they are trying to protect their profits in this “perennial” issue.
The airport plans to spend up to $8 billion over 10 years upgrading facilities and that means airlines are facing increased user charges to cover costs.
It has said its domestic charges have been rock bottom for years and up to 50 percent lower than comparable airports.
But Air Chathams has said “skyrocketing” prices being charged by Aotearoa’s largest airport will dampen demand on regional routes and threaten its viability.
It operates services to Whakatāne, Whanganui, Kāpiti and the Chatham and Norfolk islands from its hangar in Auckland.
Chief operations officer Duane Emeny told Checkpoint the airline was one of the key ports for connecting the Chatham and Norfolk islands’ communities.
“Well it’s not a good scenario if Air Chathams pulls out because you know, as I’ve said in the past, there’s not a queue of airlines waiting to go into some of those ports so for them, they lose that service and they lose all of the wider economic benefit that comes with it.”
In a statement to RNZ, an Auckland Airport spokesperson acknowledged the importance of the regional airline and its service.
“We have partnered and championed Air Chathams right from the start of their operation, working tirelessly to enable them to be operationally and commercially successful because of their importance to the regions they serve.”
But the spokesperson rejected any suggestion that upgrades would make regional travel unaffordable.
“Airlines protesting against airport investment is a perennial issue that surfaces every five years when airports change their prices – a process which is currently underway.
“Airlines have strong commercial incentives to oppose airport investment in order to protect their margins.
“Today regional airfares to and from Auckland are significantly higher than they were pre-Covid (30 percent higher in 2023 than 2019 or $39). Regional airfares increased 16 percent between 2022 and 2023, higher than inflation which was 4.7 percent in the 12 months to Dec 2023. “
(file image)
Photo: RNZ / Samuel Rillstone
The airport has made the same argument in its defence of increasing fees earlier this week, when Air New Zealand criticised spending costs for the upgrade.
The airport spokesperson said the charges today “make up a fraction of the cost of an average regional airfare” and by 2027, they would be on par with Christchurch and Wellington airports.
They also said the regional charges increase in July, from $4.40 to $7.10, was still $3 to $4 cheaper than comparable current charges at other major New Zealand airports.
But Air Chathams’ Duane Emeny has said dealing with an increase at another airport, in addition to hikes at Wellington and Christchurch, added to the pressure they faced.
Since Air Chathams took on routes in Whakatāne and Whanganui in 2015-2016, there had been a massive increase in costs, he said.
“This is just another one, all of the leases that we pay on our facilities at Auckland Airport is another, that’s almost doubled since we came into this airport.
“At what point does a small airline like your Chathams put its hand up and just say this is just too much, we can’t cope with this?”
The problem would not be simply solved by passing the fee onto customers, especially as demand had already dropped in the past six months, he said.
The fee increase would represent an annual increase of about $350,000 for Air Chathams, he said.
“We’ve then got to decide how much of that can we put onto our customers, how much of it are we going to absorb and then it is increasing year on year as well.”
Auckland Airport said the redevelopment – which spans transport, terminals, runway and utility (aircraft fuelling) and airfield upgrades and upgrades to the existing domestic terminal – would increase regional gate capacity and improve the experience for customers.
“Delaying this infrastructure is not in our country’s best interests.
“In addition to the current infrastructure build, we are currently consulting with airlines on plans for increasing capacity and customer experience for regional flights.”
Emeny said he appreciated that it was a user pays model and that Auckland Airport wanted to put the investment back into its infrastructure.
“I guess for us, when it comes to this particular price setting event, where all that cap ex [capital expenditure] spend’s going. How does that really benefit Air Chathams? I mean we’re sitting down in the ageing domestic terminal, or the regional end, we’ve got some new bathrooms, that’s great but that’s about it – I can’t see real benefits coming to Air Chats but I can see the cost increases.”
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