Airways Corporation of New Zealand Limited Pricing for the 2019-2022 Period
AIRWAYS’ RESPONSE
Following consideration of feedback, Airways has made changes to required revenue, identifying cost savings where possible. Airways is committed to continuing to provide safe, high quality services now and in the future. The total increase in required revenue has decreased from $54.1m to $52.3m. Airways has also reviewed the forecast volume growth based on the latest available schedule and fleet information. While overall revenue is lower than was proposed, there has been a significant reduction in the expected volume growth in the first year of the pricing period. Due to the lower volume forecast the total price change has increased from 18.9% to 21.4%. Figure 3 summarises the changes to Airways’ required revenue and prices following consultation feedback and using the revised volume forecasts. Figure 4 summarises the final revenue and price changes by price driver.
Figure 3 – Changes to Airways’ revenue and prices
$ Revenue change
% change
FY20 FY21
FY22 Total
FY20 FY21
FY22 Total 2
Proposed revenue and price change
33.4 11.0 9.7 54.1 10.3% 3.9% 3.2% 18.9%
(0.1)
- (0.0%) (0.0%) (0.0%)
1. Revised capital to maintain current services (section 3) 2. Changes to base operating costs (section 4.A.) 3. Revised inflationary uplifts (section 4.B.) 4. Reduced cost of capital (section 4.C.) 5. Revised opening volume adjustment (section 5.A.) 6. Revised annual volume growth (section 5.B.)
-
(0.0)
(0.1)
(0.5)
(0.5%) 0.3% (0.1%) (0.3%)
(0.8)
0.5 (0.2)
0.4
0.2%
0.0 0.1
0.3
0.0% 0.1% 0.1%
(1.6)
(0.6%) (0.1%) (0.1%) (0.9%)
(1.4)
(0.1)
(0.1)
0.2%
0.2%
-
-
3.3%
3.3%
-
-
Final revenue and price change
31.2 11.5 9.6 52.3 12.7% 4.2% 3.1% 21.4%
2. Total % column includes the compounding effect of the changes.
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