Membership Benefits
REGULATORY SUPPORT
BARNZ represents member airlines in regulatory pricing processes for Auckland, Wellington and Christchurch airports. Our team has extensive experience in regulatory pricing processes and our work is supported by expert advice.
BARNZ must be consulted when regulated airports set prices
In New Zealand, these three airports are regulated as monopoly businesses under Part Four of the Commerce Act 1986. Airports must set prices at least every five years, and when they do, they must consult with their ‘substantial customers’, as defined in the Airport Authorities Act 1966. BARNZ member airlines collectively meet the definition of substantial customer. This means Auckland, Wellington and Christchurch Airports must consult with BARNZ when setting prices.
During price consultation, BARNZ seeks to ensure that capital planning is appropriate and efficient, that demand forecasts are reasonable and that prices set will not damage demand for air services. Regulated airports are not required to consult with airlines who are not BARNZ members, unless they themselves meet the revenue thresholds of a ‘substantial customer’.
Following consultation, regulated airports are able to set prices. This is called a ‘Price Setting Event’ or PSE. Following these price setting event, the Commerce Commission reviews prices as set.
BARNZ represents members in the price reviews of New Zealand’s competition regulator
BARNZ participates in Commerce Commission price reviews which follow each PSE. These reviews - which run for at least 12 months - are an examination of the proposed prices and target return set by each regulated airport. If the Commerce Commission finds that a regulated airport has targeted excess profit, that airport may respond by lowering prices for the remainder of the five year price period.
Historically, these price reviews have resulted in lower prices for airlines - most recently Auckland Airport has announced reduced price increases following the Commission’s final report. BARNZ continues to advocate for better regulatory settings so that airlines are not required to pay excess prices while reviews are undertaken and capital commitments made by regulated airports are not excessive.
