The Commerce Commission says Auckland Airport is targeting excess profit of about $190 million and businesses and consumers are likely to end up carrying much of the burden for high charges.

But the country’s busiest airport today said it would discount prices for airline passenger charges.

In June, the commission said Auckland Airport’s revenue and targeted returns were in excess of what was reasonable, but the airport’s planned investment seemed appropriate.

In its final report today, the regulator again said the airport’s forecast investment was within a reasonable range, but said its targeted returns were unreasonably high.

A key issue was whether the airport’s investments would lead to costs being passed on to travellers.

Air New Zealand has questioned some of the airport’s spending, with chief executive Greg Foran saying last year the infrastructure spend was huge, but set to deliver little new capacity.

The airport in September launched a $1.4 billion equity raise to help pay for billions of dollars in developments, including the domestic terminal’s $2.2b upgrade.

“Price increases will fund investment needed to improve customer experience, build more resilient infrastructure and add additional capacity, but the increases are higher than what is needed to achieve these outcomes,” commissioner Vhari McWha said today.

The commission has acknowledged each airline could decide how to manage extra costs, but said travellers were likely to bear much of that and did not really have a choice, so the regulator was stepping in.

Auckland Airport had been targeting an 8.73% return from priced aeronautical activities such as aircraft landing and passenger terminal charges, compared with the commission’s “estimated reasonable return”.

That reasonable return was previously estimated at 7.28- 7.51%, but today the regulator said it was 7.3-7.8%.

The airport today said its new changes for costs such as airfield use and other essential airport services represented a new targeted return of 7.82%, down from 8.73%.

Auckland Airport chief executive Carrie Hurihanganui this morning said the airport carefully balanced how to set charges with the need to invest in future resilience and capacity requirements.

“To support this, investors require fair returns and a stable regulatory regime.”

She said for the first two years of the latest price-setting period, Auckland Airport’s reported return was 5.53%.

“We anticipate there will continue to be a significant gap to the targeted return for the remainder of the pricing period,” Hurihanganui said.

In a cross-submission last October, Qantas said: “The costs of wasted investment continue to grow, impacting consumers, investors and the economy.”

Qantas said it wanted the Commission to reduce the incentive to over-invest by confirming it did not accept the excessive returns demanded by Auckland Airport.

But at about the same time, NZ Airports said airline submissions were “heavily coloured by an overarching strategy to seek regulatory change”.

The airports group suggested airlines were “simply aiming to make Auckland Airport, and the regulatory regime, look as bad as possible”.