Carrie Hurihanganui: Auckland Airport CEO on the Commerce Commission report into the airport's targeted returns

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. 

CEO Carrie Hurihanganui told Mike Hosking they said last year that if the commission continued to see a difference between the returns they targeted and what they received, they would change it, and they did.  

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Episode Transcript

Speaker 1 (00:00):
Now. The vexed relationship between Auckland Airport and the airlines
got another airing yesterday, as we told you on the
program when it broke as the Commerce Commission report into
the airport's charges was released. Mixed bag. ComCom says the
forecast revenue was too high and the charging around planned
upgrades that was okay. The Auckland Airport CEO is Kerry Hudahunganui,
who is with us. Very good morning to you.

Speaker 2 (00:19):
Good morning mate.

Speaker 1 (00:19):
I noticed you moved as quickly as you could yesterday
once the ComCom release came out. Were you simply testing
the water to try it on till you get told otherwise?

Speaker 2 (00:29):
No, not all. I mean that's the ragime working as
it's intended to. We had sat in the draft report
that came out in July last year that if they
continued to see a difference in that range than what
we'd targeted for, we would move, and we did. The
difference really being about probably how you treat comparative sets
and risk off the back of the pandemic, probably being

(00:50):
that a funnel driver of that difference of view on
what that targeted return should be. If you take that
into account.

Speaker 1 (00:58):
Do you accept what the ComCom said is because they're
right or because you have to.

Speaker 2 (01:05):
Listen to one of these things, because it does come
to risk, right, and risk is one of those elements
that is not always black and white. Certainly, coming out
of the pandemic, you saw that play right, and a
lot of that risk sits with the airport. And when
you invest in infrastructure, if the passengers don't turn out,
for example, we've had a slower recovery and tourism across

(01:26):
and vettings, then we plan to That risk sits with
the airport that doesn't sit with others. So no, I
think it's that element of the regime balancing all of
those things in the long term interests of the consumers,
actually not in the short term interests of airlines or
airports for that matter.

Speaker 1 (01:41):
The advantage you have is, of course, per passenger, it's
a handful of sets of not a couple of bucks.
As opposed to some of the stuff you're arguing about
about the increase in the cost of airlines. Is the
relationship you have with your customers i e. The airlines
more fractious than it should be.

Speaker 2 (01:59):
I think you need to probably split it out. Mike
and what I say is that at operationally running safe
seamless operations is the goal of both airlines and airports.
There's a symbific relationship there. We rely on each other
for our fortunes. So on a day to day basis
and looking towards things like future innovational technology, we work

(02:19):
really well together. Every five years, when you get into pricing,
there is always tension and it is fractious. Nobody wants
to cost to go up, which is understandable. We're facing
those pressures as well. So I think the pricing conversations
are different than what I would describe kind of the
day to day and ongoing relationships.

Speaker 1 (02:37):
Appreciate your companies almost carry Who to Hang ANDOWI? Who's
the Auckland Eports?

Speaker 2 (02:42):
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