Cath O'Brien: Board of Airline Representatives Executive Director on Airways NZ's proposed price increase

Our air traffic management provider's signalling its own prices will soar, come July. 

Airways NZ's proposing a 7.7% price rise for airlines – a per seat increase of up to $2.80. 

Air New Zealand warns it could bring detrimental impacts, while the Aviation Industry Association struggles to see how it could be justified. 

Board of Airline Representatives Executive Director Cath O'Brien told Mike Hosking she's not a fan of the proposal. 

She acknowledges Airways have projects to invest in, but says it's the latest in a long list of price increases for airlines flying here. 

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Episode Transcript

Speaker 1 (00:00):
Speaking of cost plus accounting, Airways, which is our air
traffic management provider, is suggesting they might like to increase
their fees by seven point seven percent as of July.
Thank you very much. That's up to two dollars eighty
your seat, every seat every time you fly in. Of course,
you know who pays for that. Executive director at the
Border Airline Representatives Cathe Brian's Begler, This's cath Morning.

Speaker 2 (00:20):
Good morning mate.

Speaker 1 (00:21):
I take it you're not a fan.

Speaker 2 (00:23):
Not a fan. I mean over the three years, we're
actually looking at twenty two point eight percent increase and
fourteen point four percent in the first year, so it's
front loaded, right up front, effect of one July twenty
twenty five checks notes. That's actually just in a few
months once we get through, of course, the price consultation.

Speaker 1 (00:44):
Do it. Well, that was I'll come to that in
the moment. Do the airways have an argument as to
why this is so necessary?

Speaker 2 (00:51):
Look, they have a number of things that they need
to invest in, and lots of those things are really important.
Don't get me wrong. We need to have the air
traffic controllers, we need to have so sky it's important.
But what the sort of bigger problem here is that
this is the latest and a long round of price
increases for airlines flying to New Zealand, which is not
taking us in the direction we want to when it

(01:12):
comes to tourism.

Speaker 1 (01:13):
No, because I thought we'd dealt with this this business is.
You know that the inflation was under control, so clearly
it's not in these particular cases. Where is the regulation
that can they just say that's the number or not?

Speaker 2 (01:26):
Yeah, they essentially can say that's the number. Much like airports.
They can. They can set prices and indeed they target
like a profit because their ways is an soe, they
have to target a commercial return. So in these prices
there is a commercial return proposal of eight point zero
eight percent, So that's the thing that we're having to

(01:46):
pay for. Yeah how much? Right? You heard me? Eight
point zero eight percent target return.

Speaker 1 (01:52):
So that would involve the government at that point to
maybe put some pressure on them at that end of
the scenario, and that will get passed on like airport's
passed on. So I'm going to end up paying for it.

Speaker 2 (02:00):
Aren't I? Yeah? Look look here you are, and you
know the trouble that New Zealand's got at the moment
is we've got Aukland the airport where prices are rising.
Every single year, We've had the Civil Aviation Authority increase
its levees for large airlines by one hundred and forty
three percent. Was it also effect of one July twenty
twenty five and now we have airways fourteen point four

(02:22):
percent as the first tranch of this in one July
twenty twenty five. All of these things are hitting foreign
airlines in a commercial profit view of their.

Speaker 1 (02:32):
Route, which of first then brings us to tourism. And
when they say we're expensive.

Speaker 2 (02:36):
We are, we really are. And that's ignoring the international
visital levy at one hundred god dollars per person plus
the visa charges that went out last year. So New
Zealand really is pricing itself out of the market when
it comes to aviation hopeless.

Speaker 1 (02:51):
Kath, nice to talk to you. Appreciate it, Katha, Brian
Border Airlines representatives. I was slightly confused there for a
moment because what she was suggesting, I don't know if
you picked it up, is that when somebody puts their
prices up, that price gets passed on. But I was
listening to Donald yesterday in America who was saying that
when you put your prices up, the prices go down.

Speaker 2 (03:10):
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Speaker 1 (03:15):
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