In its final report on Auckland Airport’s 2022–2027 price-setting event, the Commerce Commission determined that the airport’s forecast revenue is excessive, and its targeted returns are unreasonably high.
However, the commission found that the airport’s planned investment falls within a reasonable range.
“The airport is targeting excess profit of about $190 million, and its charges are too high, with businesses and consumers likely to end up carrying much of the cost burden,” Commissioner Vhari McWha said.
She said the excess profit corresponds to a targeted return of 8.73% on priced aeronautical activities, such as aircraft landing and passenger terminal charges. This exceeds the Commission’s estimated reasonable return range of 7.3% to 7.8%.
McWha clarified that although the Commission does not regulate the prices set by Auckland Airport, its review serves to assess whether the airport’s pricing decisions and anticipated performance contribute to the long-term benefit of consumers.
“Price increases will fund investment needed to improve customer experience, build more resilient infrastructure and add additional capacity, but the increases are higher than what is needed to achieve these outcomes,” McWha noted.
In terms of costing its investment plan, the report has found that Auckland Airport employed appropriate processes.
“There are a range of investment outcomes that are consistent with what we’d expect to see in a competitive market. This range reflects uncertainty about future demand and choices about factors such as service quality.”
“We are satisfied that Auckland Airport’s decision is within this range.”
In previous reports, Auckland Airport is currently undertaking a major redevelopment project to construct a new domestic terminal that will be connected to the existing international terminal. The project, which started in 2024, is expected to feature 12 jet aircraft gates, check-in kiosks and automatic bag drops, two baggage reclaims, and additional dwelling and retail space.
The construction is set to complete in 2029.