NZ needs competition in airports and airlines

Auckland International Airport, the country’s main gateway, reported that net profit last year jumped 21 per cent to $215.9 million from sales of $475.8 million. Income underpinning that profit was helped by passenger service charges of $131.6 million and car park revenue was $42.8 million.

Net profit of $216 million from sales of $476 million? Wow…! Maybe the figures won’t be so good for next year, but they’ll still be pretty good and why not? Auckland airport is a monopoly. It can virtually charge what it likes. And personally, I think they’re a bunch of arrogant rip off merchants who could do with a damn good dose of real free enterprise in the shape of a few more airports. Its called competition.

National Party Minister Gerry Brownlee recently rejected plans for a new airline to operate out of Whenuapai airport in the northern suburbs of Auckland, on the grounds of noise. It would be easy to see such a weak excuse as smoke screening the government’s intent to shield its own airline, Air NZ, from competition. Aucklanders badly need competition in airports and airlines. Should the govt deny customers this competition based on the NIMBY excuse of noise and protecting its own interests?

Air NZ went broke once before trying to undercut competition. In 2001 it posted the amazing loss of NZ$1,425 million. It was saved by an injection of $885 million of taxpayer money from the Helen Clark govt.

Interesting that its much smaller main competitor, sent broke by Air NZ’s savage price cutting, ended up facing fraud charges, but in all of the shonky dealings that led to the much bigger collapse of Air NZ, no one was ever charged. I don’t fly Air NZ (unless there is no other option) because I think they are not capitalists but socialist cronyists.

My view is that the new airline should be permitted to use Whenuapai. Both Auckland airport and Air NZ could do with the competition. And the govt should get the hell out of the airline business.



Categories: Economics, NZ Politics

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