The report, which examines the impact of major investment decisions made by regulated airports, finds that there is more that could be done to ensure benefits to consumers are delivered over the long term.
Cath O’Brien, executive director of BARNZ says the changes to regulation announced by the commission will help provide better oversight of large investment decisions.
‘The changes will help make sure that very large developments proposed by regulated airports are efficient, affordable, and don’t burden New Zealand’s aviation system and its passengers with unreasonable costs,’ O’Brien says.
‘It’s great to see the Commerce Commission has committed to taking immediate action to improve regulation. The report tells New Zealanders there’s more to be done, calling out targeted legislative change. BARNZ members hope the government takes these necessary next steps with urgency.’
The commission will make changes so airports make earlier disclosures about major capital plans.
‘This makes sense,’ says O’Brien. ‘Early disclosures about very substantial capital plans allow the commission to make sure these very high cost plans deliver on what they promise Kiwis. This is similar to what the commission already does for other large scale monopoly investment.’
With information disclosures for substantial capital cost provided ahead of final commitment, the commission would be well placed to suggest balancing solutions such as tilted annuity depreciation, as noted in the report.
