Palmerston North Airport today announced that it had completed its formal aeronautical pricing review and will introduce new pricing in two stages.

From 1 December this year landing charges to airlines will increase by approximately 17%, with the present $5 departure levy remaining in place. This will provide an increase in aeronautical revenue (landing charges plus departure levies) for the Company of approximately 10%. This is the first increase in pricing since 2005.

Palmerston North Airport Limited Chief Executive, Garry Goodman said “the revenue increase to the Company from the changes amounts to approximately 50 cents per arriving and departing passenger.”

From 1 October 2012, the domestic departure levy will cease and be incorporated into the landing charges paid by airlines.

Palmerston North Airport Limited Chief Executive, Garry Goodman, said “that as airlines sold tickets well in advance, a reasonable period of notice has been provided for the change to incorporate passenger levy into airline charges. This is to allow the airlines to recover the charges to them in their fare structure should they wish.”

He said “while decisions on fares were for the airlines to make, he did not expect that the changes should result in any significant change in the overall cost to travellers using Palmerston North airport. However from October 2012 airport users will no longer have the inconvenience of having to purchase a separate levy.” he said.

Mr Goodman said “the pricing review has taken account of submissions from parties required to be formally consulted by legislation. Amongst a number of factors considered, it also takes account of the inconvenience and dissatisfaction expressed by the public about the domestic departure levy and international trends to streamline the passenger experience at airports.”

He said “After these changes the airport would receive a return on its invested capital that was still below a commercial return, but that the Company has to balance the potential for higher returns against the desire to attract growth in activity and the pricing of similar services at other New Zealand airports."