Aviation New Zealand’s chief executive John Nicholson tells us why he believes DOC’s new landing charges are an unfair imposition on an industry already operating under heavy fee burdens, with more to come later this year.
The cost increases that are proposed are serious and mean real things to the companies involved.
The Department Of Conservation (DOC) already gets income calculated as a percentage of gross income from activities associated with scenic flying, such as guiding, so these latest landing fee increases are additional to that.
The concern is that if we look at the quantum nature of these increases over the next three years and the impact that they will have on companies – companies that haven’t been increasing their prices to consumers for a few years because they operate in a very competitive market.
There is also the fact that companies marketing in an international market have to commit to prices they will be charging some time out. They don’t suddenly have the ability to increase them quickly. In terms of being a professional tourism operator that is seriously committed on the international stage, a lack of professionalism around prices does not sit neatly.
Margins are tight in the general aviation (GA) sector, which is a reflection of the current competitive market and the fact that the GA fleet in New Zealand is older than the commercial fleet. It still operates safely but the sorts of technology economies we see coming from the likes of Boeing and Airbus with aircraft on international routes, which is leading to lower air fares, is not happening in the GA industry in New Zealand, or anywhere else for that matter.
Civil Aviation Authority charges may also be going up on 1 July and that will also have a considerable cost impact on a lot of our members.
The concession agreements that the operators have with DOC, to be fair, allow DOC to increase prices, but this price increase has come out of the blue. There does not seem to have been any consultation.
Companies may well leave the market and we won’t be able to service the number of tourists that arrive looking for aviation experiences.
What can we do? We can make our feelings clear to DOC and we can organize. We have a Users Group meeting today with DOC and other stakeholders and we will be talking to the Tourism Industry Aotearoa about the announcements too.