Airways Corporation of New Zealand Limited Pricing for the 2019-2022 Period
Figure 4 – Revenue and price increase drivers
CONSULTATION PROCESS
$ Revenue change
% change
FY20 FY21
FY22 Total
FY20 FY21
FY22 Total 3
15.6
8.2%
1. Enhanced services
6.5
4.7
4.4
3.5% 2.0% 1.8%
EXECUTIVE SUMMARY
2. Business transformation (including ATM platform)
12.9
6.8%
9.0 5.6 (1.7)
4.7% 2.5% (0.7%)
3. Capital to maintain current services
4.7
2.5%
2.9
0.1
1.7
1.5% 0.0% 0.8%
PART A AIRLINES
19.1
10.0%
4. Changes to operating costs (including inflation)
12.8
1.1
5.2
6.7% 0.7% 2.2%
PART B GENERAL AVIATION
Total increase
31.2 11.5 9.6 52.3 16.4% 5.2% 4.1% 27.5%
5. Volume growth
3.0%
Opening volume adjustment
3.0%
3.1%
Annual volume growth
0.7% 1.0% 1.0%
APPENDIX 1 PRICING TABLES AND EXAMPLES
Total price change
12.7% 4.2% 3.1% 21.4%
3. Total % column includes the compounding effect of the changes.
APPENDIX 2 SUPPORTING INFORMATION
Airways is aware of the impact the price increases will have on customers and the ongoing sustainability of some locations and services. The decision to increase prices has not been taken lightly, however the price increase is necessary to fund new investment such as digital towers that will contribute to the sustainability of services in the longer term. Airways is operating in a challenging industrial and economic environment which is placing pressure on operating costs. Airways is proud of its track record of strong cost control, and will continue to work hard over the next three years to deliver the benefits of the business transformation programme. Airways notes customers’ concerns about monopolistic behaviour, and seeks to assure customers that it is acting in a responsible manner through transparent engagement with its customers and stakeholders in the setting of prices and reporting on financial and service performance. Airways acknowledges Aviation NZ’s comment about linking performance with financial outcomes and notes that this would likely require a change to Airways’ Pricing Framework. Further discussion about the Pricing Framework is covered in ‘Submissions on other airline topics’.
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