Passengers better off with new prices at Wellington Airport

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Last updated 16:46 30/06/2014

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Passengers will be better off, at least in the short term, after Wellington Airport set new prices for airlines to use its terminal and runway.

The new aeronautical charges will reduced by 7 per cent for the 10 months ending March 31 next year, and then gradually increase.

Charges passed on by airlines to passengers would drop on average by about $1, then slowly rise so that by April 1, 2018, they would be about $2 higher.

Airport chief executive Steve Sanderson said the new prices had been set in "collaborative consultation" with Air New Zealand, Jetstar, Qantas and Virgin.

The airport's targeted return for the five-year period would remain within the acceptable regulatory benchmark. The process used by the airport to set new prices was consistent with Commerce Commission guidelines, he said.

The airport released its 2013 performance results to the commission last year. Its return on aeronautical assets was 6.23 per cent, well under the regulatory benchmark of 8 per cent.

The airport also flagged its intention to consult airlines to set new prices for June 2014 to June 2019. The commission's review of the airport's performance noted its current returns were under the acceptable range and this had always been the case.

The commission also recognised the airport's transparent and consultative approach to setting prices, innovation and delivery of a quality passenger experience.

"Wellington Airport makes a vital contribution to the local and national economy and it is important that the regulatory regime provides incentives to invest and grow tourism and travel infrastructure over the long term," Sanderson said.

The "positive outcomes" would result in the airport investing $112 million over the next five years in the terminal's expansion and apron development.

"We believe this is a great package for the airlines and travelling public."

The airport would start on the extension to the main terminal in September. It would add 5200 square metres of space, double the width of both southern piers and remove the large air conditioning units that took up a significant footprint in the main terminal.

"In addition to the major extension, we are also going to improve the domestic lounges at the northern end of the terminal, along with introducing washroom facilities at the gates."

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