We conducted an inquiry into the airfield services at Auckland, Wellington and Christchurch international airports and found in 2002 that the airfield services supplied by Auckland International Airport should be controlled.
The inquiry was requested by the Minister of Commerce and focussed on the three largest airports in New Zealand by total revenue and volume (aircraft movements, passenger numbers, and freight volumes).
Our inquiry found the three airports faced limited competition in their relative geographic markets for the provision of airfield services. These services were defined as airfield activities undertaken (including the facilities and services provided) to enable aircraft to land and take off.
In considering whether control was necessary or desirable, we attempted to measure the benefits that acquirers would be likely to receive if airfield services were subject to control. This measurement of benefits was net of the likely costs of such control (where the costs of control were additional to those already being incurred, under the present regulatory regime).
Our recommendation was made on 1 August 2002, asking the Minister to recommend to the Governor-General that an Order in Council be made declaring that the airfield services supplied by Auckland International Airport Limited be controlled.
Subsequent regulation
Price control was not imposed at this time as further analysis by the Ministry of Commerce suggested the benefits of imposing control were not sufficient. At that time, the only regulatory option available under the Commerce Act was full price control, ie there was no option for information disclosure only, or negotiate/arbitrate regulation as alternatives to full price control.
These forms of regulation were added to the Commerce Act in 2008.
