WELLINGTON, Nov. 2 (Xinhua) -- New Zealand's monopoly regulator Friday criticized the country's main international airports for extracting "excessive profits" from airlines and travelers.
The Commerce Commission released a draft of a report to the ministers of commerce and transport on an information disclosure regulation regarding Wellington International Airport, which services the nation's capital.
The report was compiled after the airport, which is 66 percent owned by infrastructure company Infratil and 34 percent by Wellington City Council, set new prices on March 1.
"Our draft findings are that the information disclosure regime is working well in some areas, but it is not limiting Wellington Airport's ability to extract excessive profits," Commerce Commission deputy chair Sue Begg said in a statement.
"Wellington Airport's target of a 9.5 percent return is excessive."
The commission's analysis found the airport would actually have a return of 10.18 percent to the end of the 2013-2017 pricing period.
"Either figure significantly exceeds our estimate of a reasonable rate of return, which we base on our cost of capital input methodology. We think a reasonable return is in the range of 7 to 8 percent," said Begg.
The airport had improved transparency in setting prices and investment in innovation seemed appropriate, she said.
Wellington Airport issued a statement Friday saying its effective rate of return was actually 8.1 percent, which was at the lower end of the commission's published cost of capital for airports at the time of price setting.
"While the commission has focused on a forecast return of 9.5 percent, they have not taken into account the airport's commercial concessions. The current pricing is below what the commission considers as reasonable," chief executive Steve Sanderson said in the statement.
Wellington's charges were in the lower range of Australasian airports in terms of cost per passenger, he said.
The current airport charge per passenger was 11.11 NZ dollars on average (9.19 U.S. dollars) at Wellington, compared with almost 16 NZ dollars at Australia's Sydney Airport.
"New Zealand's airport prices are low when compared with airports worldwide with good investment and innovation further demonstrating that the market is functioning well," Sanderson said.
The commission's final report to the ministers would be completed on Dec. 21, while reports on the country's other two main international airports -- Auckland and Christchurch -- would be completed next year.
Under New Zealand's Commerce Act, the airports are required to release information to the commission, and to promote the long- term benefit of consumers through lower prices and improve services and facilities.
In July, then chief executive of Air New Zealand Rob Fyfe complained that Wellington Airport was price gouging, telling the New Zealand Parliament's finance and expenditure committee that landing fees in aggregate were set to rise by 200 million NZ dollars over the next five years.