Billie Moore: New Zealand Airports Association Chief Executive on the Commerce Commission and Auckland Airport's latest interactions

The Commerce Commission and Auckland Airport's latest interactions are being seen as a sign regulation is working. 

Auckland Airport isn't lifting its airline charges for the next two years as much as intended, after the commission's report showed their targeted returns were too high.  

The report also found the airport's multi-billion-dollar infrastructure investment plan is appropriate. 

New Zealand Airports Association Chief Executive Billie Moore told Andrew Dickens the investigation is all part of the part of the process. 

She says the feedback wasn't unexpected because these processes take time. 

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Episode Transcript

Speaker 1 (00:00):
The e Commerce Commission says Aukland Airport has been overcharging airlines

(00:03):
by one hundred and ninety million dollars since twenty twenty three.
So where did the airlines get that money from your airfares?
This year's price increase won't be as big as initially planned.
After the findings were released, usually the airport's association chief
executive Billy Moore is with me, good morning to you, Billy.

Speaker 2 (00:19):
Good morning.

Speaker 1 (00:20):
So there's a lot of money. One hundred and ninety
million dollars. How did no one notice? Oh?

Speaker 2 (00:25):
Look, and this is part of the process, and I
know it sounds a bit boring, but it's true. So
the Comments Commission has come out with its judgment and
Aukland the Airport has responded immediately to lower its prices
for the rest of the period. And so what that
means is that there won't be overcharging for the period
because they'll be compensating for that one hundred and ninety

(00:48):
million for the rest of that pricing period, so it
will eat it out. It wasn't unexpected in terms of
the feedback from the Commission because of how long these
processes take. The Aukland the Airport team had to had
to use a previous version of what we call the
Commerce Commission's input methodologies, which helped them figure out what

(01:08):
the right rate of return for their own viases should be.
That meant that the Commission was bound to have some
feedback on there. They've given that feedback and the airport
has made that adjustments. So that's what the system.

Speaker 1 (01:19):
Is supposed to do exactly. But you know, the airport
received the final report from the ComCom on Friday. They
worked over the weekend. They revised its costs down just
like that on a Monday. So does that suggest they
already knew they were guilding the lily?

Speaker 2 (01:33):
Well, the draft report had been released in July last
year already kind of indicating the Commerce Commission's direction of travel,
so that gave a bit of an indication quite well
in advance. Then there was a cross the mission process. Again,
it sounds a bit boring, but that means that everyone,
including the airlines and the airports, provide more feedback to

(01:55):
the Commission to make sure that they're coming out with
the right call, so that they were ready to respond.
But it's not unexpected.

Speaker 1 (02:02):
That they would be okay, But you know, the perception therefore,
is that the airport's trying to get away with as
much as it can.

Speaker 2 (02:11):
Look, I disagree when you might expect. Look, fundamentally, we'd
have to build infrastructure in this country, and there's two
things that we need to get there done, which the
airport has been focusing on. The first is a stable
regulation for investors to see that the system is stable
and working. And second is I fair rate of return?

(02:32):
Otherwise the airport can't raise the funds for this essential infrastructure.
So part of this process is about working with the
commission and providing all the information on the table transparently
so that we can get to that what is that
right rate of return for a long running investment like
an airport.

Speaker 1 (02:48):
So you would say, you would say that even though
they overcharge us by one hundred ninety million dollars in
twenty twenty three, this is proof that the regulatory system
is actually working acceptably.

Speaker 2 (02:57):
That's right, because the commissions come out with this adjustment
in the newport has adjusted. That's how the system is
supposed to work. Yes, they went too high, but they
have made the adjustment and they will all smooth out early.

Speaker 1 (03:10):
Superior, Billy, I thank you so much for your time today.

Speaker 2 (03:14):
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