28 November 2017 Jo Perry Chief Advisor, Compliance and Performance Analysis Regulation Branch Commerce Commission
[email protected] Dear Jo, Review of Auckland and Christchurch Airport’s third price setting events – Process & Issues paper Executive Summary 1. A full and independent review of the recent pricing decisions by Auckland and Christchurch Airports is essential. Both airports have set prices that are not in the long-term interest of consumers and more must be done to protect consumers from the harm caused by monopoly pricing and monopoly service provision. 2. BARNZ and our members support the Commerce Commission carrying out a review of the pricing decisions and publishing a report on its findings. It is essential to have a clear statement of whether the pricing decisions are consistent with the Purpose of Part 4 of the Commerce Act 1986. 3. We support the Commission’s proposed timeframe for the review, but are concerned that the proposed scope is too narrow (ie the consultation paper proposes that quality of service, innovation and prior year expenditure efficiency will not be part of the review). If these items are excluded, the Commission will struggle to reach a full view of the performance of the airports and to determine whether the Part 4 Purpose is being met. More importantly, without a review of airport quality, innovation and efficiency, there is a real risk of consumers continuing to pay for inefficient airport costs, or receiving poor quality service or not benefitting from innovation. There is a direct link between investment levels, expenditure efficiency and service quality – these items cannot and should not be separated for the review.