The Commerce Commission has identified what it considers to be the critical issues for its price control study of Auckland, Wellington and Christchurch International Airports.

Commissioner Dr Kate Brown said that this is the first time a price control study has been carried out under the Commerce Act since it was passed in 1986.

Last year the Minister of Commerce required the Commission to report by 14 December 1999 on whether he should recommend the introduction of price controls on airfield activities at the three main international airports. Airfield activities are the activities undertaken (including the facilities and services provided) to enable the landing and take-off of aircraft.

Dr Brown said that the Commission is about to commence the formal phase of its investigation. The Critical Issues Paper published today identified the areas the Commission is particularly interested in receiving information about, including the following:

  1. Interpretation of Parts 4 and 5 of the Commerce Act;
  2. Market definition and competition analysis;
  3. Airport charging and cost allocation methodology;
  4. Asset valuation;
  5. Cost of capital;
  6. Rate of return earned relative to cost of capital; and
  7. Whether control of airfield activities should be recommended and how controls would operate.

Interested parties will be able to make submissions to the Commission and participate in a conference before the final report is presented to the Minister.

The revised timetable for the formal phase is:

By August 27

Interested parties make submissions on Critical Issues Paper.

September 17

Commission publishes draft report stating whether price controls should be introduced and how they would be administered.

By October 8

Interested parties make submissions on draft report.

By October 15

Experts employed by interested parties make submissions.

October 28-29 and November 1-4

Conference where interested parties can provide further information and the Commission will ask questions. The media and public can attend.

December 14

Commission reports to Minister of Commerce.

Copies of the Critical Issues Paper will be available from the Commission's website, www.comcom.govt.nz, and its Wellington office, Level 7, Landcorp House, 101 Lambton Quay.

Media contact:

Commerce Act Manager Geoff Thorn

Phone work (04) 498 0958

Commission media releases can be viewed on its web site www.comcom.govt.nz