Airways Corporation of New Zealand Limited Pricing for the 2019-2022 Period
SUMMARY OF SUBMISSIONS
CONSULTATION PROCESS
Air Chathams has highlighted the impact of these price increases on the sustainability of some regional routes. Its submission highlighted where it considers there are limitations in Airways’ pricing model, including: X X at low volume locations higher prices can lead to reduced volumes, which in turn creates a spiral of further price increases, until the location becomes unsustainable. X X the aerodrome operator determines the level of service required, without a direct financial incentive to progress a fit-for-purpose service level. X X Airways’ pricing should be at a network level, so costs are spread more equitably amongst operators. X X There should be an independent determination of the level of service required at each aerodrome. AIRWAYS’ RESPONSE Airways is very aware of the impact Airways’ charges can have on the sustainability of aviation at lower volume regional locations. Airways continues to focus on providing fit-for-purpose services to ensure prices are appropriate. Network pricing - Airways uses location specific pricing to ensure that the price for services at a location reflect the underlying costs of providing services at that location. This is important so that prices send efficient signals about the appropriate level of service and resourcing at each location. However, Airways bundles regional locations into two groups based on the level of service provided – this has the effect of smoothing the price impact of capital investment. Kapiti is the only stand-alone AFIS location, and as such has its own specific price. The aerodrome operator determines the level of service provided - While the aerodrome operator does not directly pay for the cost of the service that Airways provides, it does have an incentive to determine an appropriate service level. As Air Chatham’s submission has highlighted, the ultimate consequence of not considering the cost impact on aircraft operators is that the aerodrome becomes unsustainable. Air Chathams’ submission offered two suggested solutions to these issues:
EXECUTIVE SUMMARY
PART A AIRLINES
PART B GENERAL AVIATION
APPENDIX 1 PRICING TABLES AND EXAMPLES
APPENDIX 2 SUPPORTING INFORMATION
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