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Concerns Auckland Airport's profits are too high

Author
Newstalk ZB Staff,
Publish Date
Thu, 2 Jan 2020, 2:05pm
(Photo / Getty)

Concerns Auckland Airport's profits are too high

Author
Newstalk ZB Staff,
Publish Date
Thu, 2 Jan 2020, 2:05pm

There are concerns that Auckland International Airport's future profits may be too high.

The Commerce Commission has reviewed the company's pricing decisions and isn't convinced its targeted returns are appropriate.

The company is seeking a return of 7.06 pe cent on its regulated asset base - which is above the commission's mid-point benchmark of 6.41 percent.

This means customers could end up paying 61 cents more per flight - which would see the airport earning an additional 47-million-dollars in profits before tax.

Board of Airline Representatives New Zealand director Justin Tighe-Umbers told Larry Williamssays the airport is justifying the heightened return on it's near $2 billion investment in infrastructure.

"But on the other hand, the airport's continuing to return 100 per cent of their underlying profit after tax to shareholders with their dividends continuing to go up year on year, and that just simply doesn't stack up."

LISTEN TO JUSTIN TIGHE-UMBERS TALK WITH LARRY WILLIAMS 

 

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