Airways is a State-Owned Enterprise established under the State-Owned Enterprises Act 1987. Airways provides services on a commercial basis under that Act, and is also authorised by Section 99 of the Civil Aviation Act 1990 and under Civil Aviation Rules to provide the services covered by these terms.
Our role is to provide a safe and efficient air traffic service. We do this by delivering world-class services and real value to our customers.
The Air Navigation Services (ANS) we provide include:
In competitive markets, market forces determine services and prices. As there is no competition for many of Airways' services in New Zealand, a different mechanism is needed to define services and service levels, and to set prices.
We carry out business efficiently and build stakeholder confidence by maintaining a clear Service Framework and Pricing Framework. These define our services, set prices and incentivise excellent performance.
The Service Framework sets out the services we provide, who receives them, and where and how the services are delivered.
The Pricing Framework defines the methodologies to price these services.
The Standard Terms and Conditions for the provision of Airways’ services present the prices and contractual terms under which Airways provides its services.
You can work out the costs of your upcoming flight using our Charges Calculator.
Airways is consulting with customers, stakeholders and the industry on our Price Reset for the period 01 August 2022 to 20 June 2025.
We are very aware of the impact COVID-19 continues to have on the aviation industry, which is why, through the consultation, we are seeking to strike the right balance with respect to our pricing for the next three-year period while at the same time supporting the recovery of the industry.
To support the recovery of the industry, at least for FY23, we will not be seeking full recovery of cost. This has been made possible through the Government’s support, as our shareholder, by agreeing to continue their financial support of Airways, for which we are grateful. This will allow us to limit price increases to our customers and ensure that Airways recovers in step with the wider industry.
We have assumed a volume position, in consultation with our customers, which is based on a recovery scenario broadly aligned to recovery patterns observed offshore, once COVID-19 restrictions are lifted.
Based on the assumed volume forecast, we propose that prices charged to airlines will need to increase by an average of 8% in FY23 and 16.9% over the three-year period to achieve target revenue.
Following consultation there may be further revision of volume forecasts and prices to get back to target revenue for the three-year period. Prices will ultimately be set on the best available information as close to the reset period as practical. Forecasts and assumptions are therefore subject to change following the consultation period.
Consultation commences on 01 April with submissions due by April 29. They will then be posted on Airways’ website for customers, stakeholders and the industry to review and submit cross-submissions on. Cross-submissions close on May 13.
Please note that we will publish all submissions on our website. This is an important step as it allows us to run a transparent consultation process and enables others to consider whether they wish to make cross-submissions. However, if you wish to provide Airways with confidential information in a submission, you must supply both confidential and public versions of your submissions. The public version will be the one published on our website. The responsibility for ensuring that confidential information is not included in a public version of a submission rests with the submitter.
Submissions
Board of Airline Representatives of New Zealand (BARNZ)
Consultation on the review of Airways’ Pricing Framework and Standard Terms and Conditions opened on Wednesday, 3 November 2021. Submissions closed on Wednesday, 1 December 2021 and were posted on Airways’ website for customers, stakeholders and the industry to review and submit cross-submissions on. Cross-submissions closed on Wednesday, 15 December 2021. No cross-submissions were received.
The Pricing Framework was set in 2012 and defines the methodologies we use to price the services in the Service Framework. Our prices are set against the Framework on a three-yearly cycle, with the next cycle running from 1 July 2022 to 30 June 2025.
Before Airways sets prices for that period, we welcomed feedback on the Pricing Framework itself as well as a proposed change to the treatment of ‘works-in-progress’ (WIP).
Airways currently includes capital expenditure in pricing when it occurs, rather than when the asset in question is forecast to be commissioned. Regarding concerns customers have previously raised, we proposed to hold WIP in a separate account until the assets are forecast to be commissioned, meaning only customers only pay for services once they start to receive a benefit from them. This approach aligns with that adopted by the Commerce Commission. We also identified a number of minor areas in our Standard Terms and Conditions that required updating to comply with changes to legislation or reflect current practice.
Airways carefully reviewed and considered the feedback on the proposals and we thank submitters for their thoughtful and informed submissions.
Taking into account the general support received from submitters, Airways has decided to proceed with our proposed amendment to the Pricing Framework in relation to the treatment of WIP.
Airways has also decided to publish a revised version of the Standard Terms and Conditions including, where appropriate, minor changes and additional amendments in response to points raised by submitters.
We appreciate the time submitters took to respond to us in a thoughtful and constructive manner.
More information on the consultation, submissions and the decision document can be read below.
Consultation documents
Pricing Framework Review Consultation Paper
Proposed Standard Terms and Conditions
Decision documents
Submissions
Board of Airline Representatives of NZ (BARNZ)
In 2021 Airways consulted on our Service Framework which sets out the services we provide and who pays for them.
The Service Framework was last reviewed in 2012 so a review was needed to ensure it remains fit for purpose.
14 submissions and three subsequent cross-submissions were received.
The feedback from submitters was that there was nothing to suggest we need to make any substantial changes to our current Service Framework.
We appreciate the time submitters took to respond to us in a thoughtful and constructive manner.
More information on the consultation, submissions and the decision document can be read below.
Consultation documents
Service Framework Review Consultation Paper
Proposed Revised Airways Service Framework
Decision document
Service Framework Decision Paper
Submissions
Auckland International Airport Limited
Board of Airline Representatives of NZ (BARNZ)
Christchurch International Airport Limited
Civil Aviation Authority of New Zealand (CAANZ)
International Air Transport Association (IATA)
NZ Air Line Pilots' Association (NZALPA)
Rotorua Regional Airport Limited
Cross-submissions
Every three years Airways consults with its customers – airlines, airports and the general aviation community – on enhancements to services and associated prices. The purpose of this is to ensure the continued safety and resiliency of the aviation network, while preparing for the future.
This latest pricing consultation commenced in January 2019 and was completed in May. The consultation included the opportunity for submissions, requests for further information and public meetings across the country.
All customer feedback, including 12 detailed submissions, were carefully considered in setting the final prices.
The final prices and Airways’ response to customer feedback are outlined in the consultation response document found below.
Pricing For The 2019-2022 Period: Consultation Response Document
Consultation documents
Download Copy of Airways pricing calculator 1 Jul 19 Final Prices
Download Airways Standard Terms and Conditions
Download Airways pricing consultation - proposed prices
Aircraft Owners and Pilots Association of New Zealand (AOPA NZ)
Board of Airline Representatives of New Zealand (BARNZ)