Aeronautical and non-aeronautical activities

Auckland Airport’s business is divided, in economic terms, into two ‘tills’. One is the aeronautical till, which is subject to economic regulation. The second is the non-aeronautical till, which is subject to open market competitive forces. A dual till regime also applies in Australia, though the scope of activities and monitoring processes differ.

Aeronautical activities comprise all elements of the company that relate to its aeronautical services, including:

  • airfield facilities to enable the landing, take-off and movement of aircraft, such as runways, taxiways and aprons;
  • terminal facilities for the processing of passengers; and
  • aircraft and freight facilities for the maintenance and service of aircraft (including re-fuelling) and the handling of freight.


For airfield facilities, Auckland Airport charges landing fees and parking charges to the airlines on a user-pays basis. Landing charges are based on an aircraft's Maximum Certified Take-Off Weight. This means that large, heavy aircraft pay more than small, light aircraft. Heavier and larger aircraft require longer, wider and stronger runway pavements, take up more space on the aprons and typically deliver more passengers to use the terminal facilities. Parking charges are levied on hourly rates by size of aircraft.

For terminal facilities, Auckland Airport charges the airlines passenger service charges and check-in charges. These changes include recoveries for terminal space, plant and equipment and services.

Summary of charged services

Services   Charge   Basis of charge 

 

Airfield landing facilities and services

 

 

  • Landing charge
 

 

  • Aircraft MCTOW
         

 

Airfield parking facilities and services

 

 

  • Airfield parking charge
 

  

  • Hourly rate by aircraft code (after six hours)
         

 

Passenger terminal facilities and services

    

 

  • Domestic Passenger Charge 
  • Regional Passenger Charge
  • International Passenger Charge
  • Transit Passenger Charge
    

 

  • Per passenger
         

 

Check-in facilities and services

 

 

  • Check-in charge
 

 

  • Varies according to check-in mode
         

 

Other regulated activities

 

 

Dedicated charges for provision of regulated activities

  • Identified leases
  • VIP airside lounges
  • Collection facilities for duty free

 

 

 

  • Lease
  • License

Auckland Airport has also set a Runway Land Charge associated with holding land for the future aeronautical development of a second runway at Auckland Airport.

All other activities are non-aeronautical. These activities compete with other similar businesses, are tendered by way of concessions/ licences to operate, or are discretionary to the users of the airport. Examples include the retail outlets in the terminals (duty free stores, speciality stores, news and book stores, and food and beverage outlets), taxis, public transport, car parks, car rental tenancies and property leases. The company gains revenue from these sources through commercially negotiated concession agreements, rental agreements, licence fees and direct charges for parking or the use of other facilities.


Current regulatory framework for airports

Auckland Airport’s aeronautical activities are subject to information disclosure regulation under Part 4 of the Commerce Act 1986. This regulation is designed to provide airport businesses with the right incentives to act in a way that benefits consumers over the long term. The Commerce Commission monitors airport performance and price setting, as well as the effectiveness of the information disclosure regime.

The information disclosure regime includes:

  • annual disclosure and monitoring of financial performance, quality (as measured by reliability measures, passenger satisfaction and operational improvement processes), capacity utilisation indicators and capital investment
  • a price setting disclosure following the setting of standard aeronautical prices (every five years) which provides information on the basis for pricing and targeted returns

Annual Disclosures

Shown below are Auckland Airport's most recent aeronautical annual disclosures:

Previous years

Land Revaluations 2009
(Initial valuation in accordance with the Determination)

Pricing decisions

Auckland Airport is subject to the Airport Authorities Act 1966, which requires consultation with major airline customers on aeronautical charges at least every five years, as well as consultation on significant capital expenditure projects.

Auckland Airport’s FY18-22 aeronautical price path consultation with major airlines and representatives began in early FY17, with the most recent pricing decision announced in June 2017. Each pricing decision triggers a requirement for Auckland Airport to release a price setting disclosure. These disclosures are set out below.

August 2017 pricing setting disclosure – FY18-FY22 (PSE3)


August 2012 Price Setting Disclosures FY13-FY17 (PSE2)

October 2011 Price Setting Disclosure FY08 - FY12 (PSE1)

Please note:

  • This Price Setting Disclosure is disclosed pursuant to clause 2.10(3) of the Determination.
  • Under the Determination, Price Setting Disclosures must be completed only in relation to specified airport services.
  • Accordingly, these Price Setting Disclosures should not be interpreted or read to cover the total operations of the company – the Price Setting Disclosure relates specifically and solely to specified airport services.

Commerce Commission review

A key part of the regulatory regime is the Input Methodologies (“IMs”). IMs set out how airports must calculate aspects of their annual disclosures (e.g. how assets are valued for regulatory disclosures) and other aspects of the regulatory regime (e.g. how the regulator estimates the industry-wide cost of capital for monitoring purposes).

The IMs must be reviewed at least every seven years, and the Commerce Commission completed a review of the current IMs in December 2016. The final decision reaffirmed that the Commission does not set prices for airport services and that its focus is on ensuring there is transparency in relation to the pricing decisions made by airports.

Shown below are links to the Commerce Commission review documents: