Airways Corporation of New Zealand Limited Pricing for the 2019-2022 Period
PART B – General Aviation (GA) prices
Airways helps GA customers operate safely within controlled airspace by providing flight information. Overall, GA activity makes up approximately 53% of movements and contributes 2% of Airways’ air navigation revenue. Pricing methodology for GA Airways’ Pricing Framework sets out the methodologies to calculate prices for the services provided to GA operators. The Pricing Framework was finalised in 2012 after an extensive consultation process. The Framework can be found on Airways’ website at: www.airways.co.nz/products-and-services/air-navigation-services/new-zealand- service-framework/ans-services-and-pricing-explained GA inflationary adjustments AIRWAYS PROPOSED Airways proposed that all GA prices are increased by inflation to ensure they stay at current levels in real terms. As part of the consultation response in 2013, Airways stated that it would adopt the NZIER inflation forecasts as standard policy to provide a consistent long-term measure. As per the Pricing Framework, GA prices are national. Prices are calculated by simply adding inflation to current prices. SUMMARY OF SUBMISSIONS There was broad support for the inflationary adjustments being used, however Aviation NZ noted that simply increasing prices by inflation does not encourage Airways to make productivity improvements. Flying New Zealand acknowledged that price increases have been minimised, but is concerned that any charges discourage the use of ATC services by recreational users. Two other GA submissions supported this view. AIRWAYS’ RESPONSE Airways acknowledges the submissions received on the inflationary adjustments, and notes that GA prices are set at a lower level than airline pricing, reflecting the lower value GA customers derive from Airways’ services. Airways believes that the Pricing Framework allocates costs equitably to the services provided. Adjusting prices by forecast inflation ensures that they remain in line with underlying costs. This approach is consistent with the previous pricing period. Airways has updated the inflation forecasts to reflect the latest available forecasts (March 2019). The latest inflation forecasts are the same as those proposed with the exception of a slightly higher value forecast for FY22, as summarised in figure 26.
CONSULTATION PROCESS
EXECUTIVE SUMMARY
PART A AIRLINES
PART B GENERAL AVIATION
APPENDIX 1 PRICING TABLES AND EXAMPLES
APPENDIX 2 SUPPORTING INFORMATION
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