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.
Pricing Framework Review Consultation Paper
Proposed Pricing Framework
Proposed Standard Terms and Conditions
Standard Terms and Conditions
Air New Zealand
Board of Airline Representatives of NZ (BARNZ)
International Air Transport Association (IATA)
NZ Airports Association