Latest / Early Edition with Ryan Bridge / Billie Moore: New Zealand Airports Association Chief Executive on the Commerce Commission and Auckland Airport's latest interactions

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Billie Moore: New Zealand Airports Association Chief Executive on the Commerce Commission and Auckland Airport's latest interactions · Early Edition with Ryan Bridge

• 0:00
  Speaker 1: The e Commerce Commission says Aukland Airport has been overcharging airlines
• 0:03
  Speaker 1: by one hundred and ninety million dollars since twenty twenty three.
• 0:06
  Speaker 1: So where did the airlines get that money from your airfares?
• 0:10
  Speaker 1: This year's price increase won't be as big as initially planned.
• 0:13
  Speaker 1: After the findings were released, usually the airport's association chief
• 0:16
  Speaker 1: executive Billy Moore is with me, good morning to you, Billy.
• 0:19
  Speaker 2: Good morning.
• 0:20
  Speaker 1: So there's a lot of money. One hundred and ninety
• 0:22
  Speaker 1: million dollars. How did no one notice? Oh?
• 0:25
  Speaker 2: Look, and this is part of the process, and I
• 0:28
  Speaker 2: know it sounds a bit boring, but it's true. So
• 0:31
  Speaker 2: the Comments Commission has come out with its judgment and
• 0:34
  Speaker 2: Aukland the Airport has responded immediately to lower its prices
• 0:39
  Speaker 2: for the rest of the period. And so what that
• 0:41
  Speaker 2: means is that there won't be overcharging for the period
• 0:44
  Speaker 2: because they'll be compensating for that one hundred and ninety
• 0:48
  Speaker 2: million for the rest of that pricing period, so it
• 0:50
  Speaker 2: will eat it out. It wasn't unexpected in terms of
• 0:53
  Speaker 2: the feedback from the Commission because of how long these
• 0:57
  Speaker 2: processes take. The Aukland the Airport team had to had
• 1:01
  Speaker 2: to use a previous version of what we call the
• 1:04
  Speaker 2: Commerce Commission's input methodologies, which helped them figure out what
• 1:08
  Speaker 2: the right rate of return for their own viases should be.
• 1:11
  Speaker 2: That meant that the Commission was bound to have some
• 1:13
  Speaker 2: feedback on there. They've given that feedback and the airport
• 1:17
  Speaker 2: has made that adjustments. So that's what the system.
• 1:19
  Speaker 1: Is supposed to do exactly. But you know, the airport
• 1:21
  Speaker 1: received the final report from the ComCom on Friday. They
• 1:24
  Speaker 1: worked over the weekend. They revised its costs down just
• 1:27
  Speaker 1: like that on a Monday. So does that suggest they
• 1:30
  Speaker 1: already knew they were guilding the lily?
• 1:33
  Speaker 2: Well, the draft report had been released in July last
• 1:36
  Speaker 2: year already kind of indicating the Commerce Commission's direction of travel,
• 1:41
  Speaker 2: so that gave a bit of an indication quite well
• 1:44
  Speaker 2: in advance. Then there was a cross the mission process. Again,
• 1:48
  Speaker 2: it sounds a bit boring, but that means that everyone,
• 1:51
  Speaker 2: including the airlines and the airports, provide more feedback to
• 1:55
  Speaker 2: the Commission to make sure that they're coming out with
• 1:57
  Speaker 2: the right call, so that they were ready to respond.
• 2:00
  Speaker 2: But it's not unexpected.
• 2:02
  Speaker 1: That they would be okay, But you know, the perception therefore,
• 2:06
  Speaker 1: is that the airport's trying to get away with as
• 2:08
  Speaker 1: much as it can.
• 2:11
  Speaker 2: Look, I disagree when you might expect. Look, fundamentally, we'd
• 2:17
  Speaker 2: have to build infrastructure in this country, and there's two
• 2:20
  Speaker 2: things that we need to get there done, which the
• 2:22
  Speaker 2: airport has been focusing on. The first is a stable
• 2:25
  Speaker 2: regulation for investors to see that the system is stable
• 2:28
  Speaker 2: and working. And second is I fair rate of return?
• 2:32
  Speaker 2: Otherwise the airport can't raise the funds for this essential infrastructure.
• 2:36
  Speaker 2: So part of this process is about working with the
• 2:38
  Speaker 2: commission and providing all the information on the table transparently
• 2:42
  Speaker 2: so that we can get to that what is that
• 2:44
  Speaker 2: right rate of return for a long running investment like
• 2:47
  Speaker 2: an airport.
• 2:48
  Speaker 1: So you would say, you would say that even though
• 2:50
  Speaker 1: they overcharge us by one hundred ninety million dollars in
• 2:52
  Speaker 1: twenty twenty three, this is proof that the regulatory system
• 2:55
  Speaker 1: is actually working acceptably.
• 2:57
  Speaker 2: That's right, because the commissions come out with this adjustment
• 3:00
  Speaker 2: in the newport has adjusted. That's how the system is
• 3:03
  Speaker 2: supposed to work. Yes, they went too high, but they
• 3:06
  Speaker 2: have made the adjustment and they will all smooth out early.
• 3:10
  Speaker 1: Superior, Billy, I thank you so much for your time today.
• 3:14
  Speaker 2: For more from Early Edition with Ryan Bridge, listen live
• 3:17
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• 3:20
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