WELLINGTON New Zealand's Auckland International Airport (AIA), the country's biggest, said on Thursday (June 8) it would raise airline charges over the next five years, in a move opposed by major users Air New Zealand and Qantas Airways.

The airlines said it was likely to lead to higher ticket prices making travel unaffordable, although the airport operator countered that the carriers were reporting strong profits.

Air New Zealand on Thursday upgraded its full-year earnings guidance for the fiscal year ending June 30 for the second time on the back of strong demand and lower jet fuel prices, but it warned airfares were likely to moderate in the following fiscal year.

The revised airline charges will be effective from July 1, the airport operator said in a statement, ending a year-long fee freeze as it looks to fund NZ$3.9 billion of improvements over the next five to six years.

Under the new charges, domestic jet fees and international fees will be around NZ$11.85 and NZ$37.35 per passenger, respectively, reaching NZ$15.45 and NZ$46.10, respectively, by fiscal year 2027.

Air New Zealand and Qantas said they wanted the airport to scale down its costly development plans, which include replacing the existing domestic terminal, to keep charges lower.

"Airlines accept that investment is needed, but what (AIA) is proposing goes far beyond what is needed or affordable," Qantas CEO Alan Joyce said in a statement.

The airport, however, was "disappointed" by the response and rejected "any claims that the infrastructure investment will hurt the travel market", an AIA spokesperson said.

"Major airlines are reporting very healthy or even record profits, with some committing to multi-billion-dollar investment in their own fleet and airport hangars," the spokesperson added.

The increase in charges comes as Auckland's mayor pushes for the sale of at least part of the council's 18.1% stake in the airport, worth NZ$2.2 billion based on current market prices.

Auckland Council members late on Thursday delayed making a decision on the sale until at least Friday (June 9). 
 

  - Reuters