SERVICE AND PRICING FRAMEWORK REVIEW: FREQUENTLY ASKED QUESTIONS
GENERIC QUESTIONS
- Why is Airways reviewing its Service and Pricing Frameworks now?
Airways’ Pricing Framework has served the industry well over the last 15 years, and Airways was able to freeze its prices for more than a decade. However, changes to the economic and technological environment mean we need to ensure the Service and Pricing Framework continues to meet the changing needs of our customers and industry and to ensure there is transparency between the prices that customers pay and the services they receive.
Currently, Airways does not have a clearly documented Service Framework; this is an opportunity to clarify customers’ needs, develop a cohesive, transparent Service Framework and focus on performance improvement.
This is, therefore, an opportune time to embark on a strategic process that looks at the framework holistically and address the various needs of our customers at once. To do this, Airways will actively consult with industry to ensure that customers have their say in the content of the Frameworks.
- When will I know if, and how, these changes will affect me?
Airways released the Proposed Service Framework and Pricing Discussion Paper in early December 2011 and invited stakeholders to provide feedback on both streams of work (until 20 February 2012).
Feedback for the Proposed Service Framework will be incorporated into the Service Framework; however, as a ‘living’ document, the Service Framework will be reviewed annually to ensure it continues to meet customers’ needs.
Feedback for the Pricing Discussion Paper will be used to help shape the scope and content of the Draft Pricing Framework which will be released in April 2012; there is then the opportunity for further feedback until June 2012, when the Final Pricing Framework will be released.
Given this timeline, and the fact that Airways is committed to its current pricing arrangements until 2013, it is not expected that there will be any changes to prices until this time. Likewise, the Service Framework Review does not propose to withdraw any of Airways’ existing services; it is, however an opportunity to clarify the requirements of our customers and better position Airways to meet those needs.
- What is the timeframe for consultation and feedback? When do you want to roll out the new Frameworks?
We are seeking your feedback on both the Pricing and the Service Frameworks by 20 February 2012.
A series of national roadshows/user workshops will be undertaken in February 2012. The second stage of the Pricing Framework involves incorporating feedback from the Pricing Discussion Paper and roadshows and using it to construct a Draft Pricing Framework, which will be released for formal consultation in April 2012; requests for further information close in May 2012, while the deadline for submissions will be June 2012. The final stage considers these submissions and produces the Final Pricing Framework, which will be released in July 2012. The Pricing Framework will be implemented in July 2013.
Feedback regarding the Proposed Service Framework will be incorporated into the Service Framework; however, as a ‘living’ document, the Service Framework will be reviewed annually to ensure it continues to meet customers’ needs.
Customers can communicate their feedback by emailing us on servicefeedback@airways.co.nz or pricingfeedback@airways.co.nz.
- How do we transition to the new Frameworks?
Airways recognises that the implementation of the new Pricing Framework may cause both positive and negative changes in individual customers’ prices. We aim to be as flexible and open-minded as possible in finding a transition approach that works for our customers.
The Pricing Discussion Paper outlines a number of potential transition options.
SERVICE QUESTIONS
- Which services will be added and which will be removed?
The Service and Pricing Framework Review does not propose to withdraw any of Airways’ existing services; rather, this is an opportunity to clarify the requirements of customers and better position Airways to meet those needs.
- What does it mean for unattended aerodromes?
Airways is committed to continuing with the existing services we provide; however, the Service and Pricing Framework Review is an opportunity for Airways to clarify the needs of aerodromes and how we meet those needs.
- What happens if I require a service that is outside the Service Framework?
The Service Framework defines Airways’ base services. Should customers require services outside of the base service, Airways will work with customers on an individual basis to determine how the additional services will be provided and paid for.
- What is the link between the Service and Pricing Frameworks?
Although their impact may be different for different customers, both the Service and Pricing Framework work streams are closely interlinked. The Service Framework defines the services provided at each location; the Pricing Framework then sets the prices for those services.
PRICING QUESTIONS
- Isn’t this really about increasing Airways’ revenue?
The Service and Pricing Framework Review is principles-based and is not about pricing levels as Airways is committed to its current pricing arrangement until June 2013. This project is about seeking customer input to determine what services we provide, where they are provided and how they should be paid for. Significant changes in the economic environment and to core technology also need to be captured in the Pricing Framework Review.
- Which prices need adjusting? How will this affect our prices?
Prices will be derived from the Service & Pricing Frameworks. Customers are invited to contribute their feedback to the Service and Pricing Framework proposals and once we have that, we will use this feedback to determine what the Frameworks will look like. Until the Frameworks are finalised, we will not know how prices will be affected.
- Why are General Aviation (GA) charged at all when they don’t need an Air Traffic Control Service?
Although in most situations GA operate using the resource that is provided for airline operations, they still use Air Traffic Control (ATC) resources and add complexity and risk to the aerodrome control zone.
- Will rebalancing prices between services and locations result in significant price changes for some customers?
The potential impact on prices at specific locations will depend on the outcome of the consultation process. Any significant changes will be quantified in the Draft Pricing Framework.
- Why are vicinity landings and circuits being addressed in the Pricing Framework?
These activities use ATC resources and add complexity and risk to the aerodrome control zone. In some situations, the volume of use can mean additional resources (usually Air Traffic Controllers) are required. The Pricing Framework considers how these costs are recovered.
- What is the impact on General Aviation activity?
The impact may vary from GA customer to customer and will depend on the outcome of the consultation process. Any significant changes will be quantified in the Draft Pricing Framework.
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Service and Pricing Framework Project
"This project is about defining our services and the way in which we price them. It is not about pricing levels...but will deliver consistency and transparency to customers. "
Ed Sims,
Airways CEO