Cath O'Brien: Board of Airline Representatives Executive Director on the Commerce Commission ruling out an inquiry into airport regulation

Airlines are backing the Commerce Commission's decision to stop short of a formal inquiry into airport regulation. 

It's instead looking at changing how much information airports should provide airlines about major upgrades. 

This follows Air New Zealand writing to the regulator, raising that the costs it was facing from airports were growing out of control. 

Board of Airline Representatives Executive Director Cath O'Brien says a formal inquiry wasn't worth it.  

She told Mike Hosking the process is complicated, expensive, and not fit for purpose, as if they ran it, they’d have to apply the findings to all airports, not just one.  

LISTEN ABOVE 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Now was it a surprise the Commerce Commission has decided
not to look into pricing at the airport's in New Zealand.
Not happy. Not surprisingly they claim four hundred and seventy
six million alone by twenty thirty two. ComCom did say
there needs to be early oversight of large airport spending.
Now CATHERL. Brian's executive director of course for the Border
beir owned Representatives and it's back. Well, this's Kath morning
to you.

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

Speaker 1 (00:20):
Are you happy or not?

Speaker 2 (00:22):
Look? I am happy that the Commerce Commission is doing
everything in its power to take a look at very
large airport price airport costs. So they proposed some changes
to the regulation that they look after so that they
will take a careful look at large proposals for airport
building ahead of that building being committed to. And I

(00:45):
think that is really important and really good and set
definitely something we need to do. So the second thing
is that the Commission has said that they can't run
an investigation, or that running an investigation wouldn't give the
right outcomes that they're looking for, essentially because the inquiry

(01:05):
process in the Commerce Act is complicated and expensive, and
when you run it. It means that you have to
apply the findings to all of the airport's, not just one,
So it's sort of not it's the purpose, right, and
so they can't use it. It's not so much.

Speaker 1 (01:22):
That they don't want to, they don't have the tools
of the rules to be able to do it.

Speaker 2 (01:26):
Yeah, yeah, yeah. And the other sort of interesting thing
is that MB ran a review into airport regulation just
earlier this year and they found the same thing. So
now the ComCom and mb agree with each other that
the Commerce Act needs an update to actually be used properly.

Speaker 1 (01:42):
For you, I'm very glad we got you on the program,
Cas because I didn't understand that part. So that doesn't
mean they don't want to or couldn't or shouldn't. It
just means they're not allowed to currently. So maybe somebody
needs to change their rules of engagement.

Speaker 2 (01:53):
Yeah. Well, it means if they did run an inquiry
it would take probably two years. It would be appealed
before the courts, so two years will be a short run.
And then once you got to the very end of it,
if you ever did, you'd have to apply those findings
to Auckland, Wellington and christ Church.

Speaker 1 (02:09):
Should I be exercised because the New Zealand line is
that it all gets passed on to the punter anyway,
and so whatever price goes up, the ticket user pays
the price. So we should all be energized to some degree,
shouldn't we?

Speaker 2 (02:21):
Yeah, well, I think we should be. I mean what
we've seen here is Auckland Airport put up this you know,
multi billion dollar capital plan six plus billion dollars, and
that has has come forward as cost to airlines. And
I can I can fairly in New Zealand's paint on
this because they pay the majority of that cost because
they are the majority airline and that location, so I

(02:41):
can see why they have strong views. But that cost
has come in at a time when the returns for
airports are quite high. So for every dollar that Capixiokland
Airport's going to make seven point eight two percent once
that our set is completed. So that's seven point two
bad right, And so that's a really good incentive to

(03:02):
build an expensive airport. When I started in this business,
returns to airports we're in the fours and fives. So
now we're in the sevens and eighth and maybe nine,
and so it's a great time to build a really
expensive asset, and so I think the COMMICS Commissioner is like, huh,
we'd better actually try to get in front of this

(03:24):
rather than behind it, which is where they are at
the moment.

Speaker 1 (03:26):
Great insight, Kath, well done, Appreciate it very much. Kath O'Brien,
executive director for the Border Berline Represented. Don't you like
bright people? Tell you what the com com did yesterday.
I don't have time to tell you now, but I
will tell you later. They hold into a couple of
brick layers in Marlborough. No wonder they didn't have time
to look at Auckland Airport. They're busy with the bricklaying
business in Marlborough.

Speaker 2 (03:44):
For more from the Mic Asking Breakfast, listen live to
news talks.

Speaker 1 (03:47):
It'd be from six am weekdays, or follow the podcast
on iHeartRadio.