Airport challenges govt regulations

Otago Daily Times

7 hours ago

Dunedin Airport has accused the government of double-dipping and questionable law-making in a submission calling on it to abandon a move which raises the cost of bringing back international flights.
Under the new legislation, airports that intend to start or restart international services will be required to pay for the establishment costs for border services.
The new regulations are expected to come into force shortly, but Dunedin Airport's chief executive Daniel De Bono argued it was tantamount to double-dipping from the government, as the costs of processing international travellers would be funded from the existing border processing levies.
In the letter to Parliament's regulation review committee, Mr De Bono said: "We cannot comprehend why a government that is focused on economic growth would make new regulations that are targeted at regional airports and severely inhibit their ability to develop international connectivity."
Dunedin Airport had international flights from 1995 until Covid-19 hit the industry in 2020.
It resumes international flights this month, with a JetStar connection to the Gold Coast.
"As with all international routes at smaller airports, the economics are finely balanced," Mr De Bono's letter said.
"When negotiating and agreeing terms, Dunedin Airport and JetStar did not anticipate that the government would take steps to impose significant additional costs on the venue.
"The wider effect of cost recovery ... is to create a real constraint on regional tourism and economic growth."
Mr De Bono said he did not believe the original intention of the Act was to "unexpectedly be used to impose more levies".
This would lead to "serious unfairness and unreasonableness" for airports attempting to re-establish international travel and would have immediate effect on Dunedin Airport, he said.
Mr De Bono also provided a legal letter from law firm Russell McVeagh.
The legal letter also cast doubts on the government's approach.
"Our view is that the proposal to now recover costs under the Airports Act is legally unnecessary," it said.
"In pursuing options for recovery under the Airports Act, Cabinet and officials appear to be relying on a mistaken view of the law, leaving their decisions open to legal challenge.
"It cannot be correct that there is a presumption in favour of using the Airports Act for new international airports simply because it exists."
In response, Biosecurity Minister Andrew Hoggard told the Otago Daily Times customs screening at airports had been cost-recovered for decades.
"Cost recovery is for the actual and reasonable cost of providing biosecurity and customs services.
"In relation to Dunedin International Airport, the Ministry for Primary Industries [MPI] has worked hard to ensure the establishment costs are fair and reasonable, including reusing existing equipment where possible.
"Under the Airports Act, if an airport chooses to start or re-start international air services, the costs incurred by the MPI and New Zealand Customs to establish a traveller processing capacity (establishment costs) and the processing of travellers (operating costs) can be recovered from the airport."
Mr Hoggard said cost recovery for establishing or re-establishing international flights was "reasonable" as "the benefits from these flights are received by the airport and those who use the airport".