The Civil Aviation Authority (CAA) has proposed a 5% cut to domestic and international passenger security levies, which CAA board chairman Mark Darrow described as unprecedented as far as he knew.
Under the proposal, the domestic levy would fall from $10.91 to $10.36 per passenger and the international levy from $22.30 to $21.19, excluding GST. The levies are paid by airlines and included in airfares. Applied to Air New Zealand’s passenger volumes from the last financial year, the cuts would save the airline $14.43 million a year.
Darrow said levies had not risen for several years around the Covid era, leading to a significant catch-up 12 to 18 months ago. He said new 3D scanning technology, lidar queue management and smarter rostering had since delivered savings, without recent layoffs.
Associate Transport Minister James Meager said the Government had committed to reducing levies once the CAA stabilised after Covid, and its cash reserves had recovered faster than expected. CAA chief executive Kane Patena said the authority would charge less where it could sustainably do so while maintaining strong security services.
Aviation Industry Association chief executive Simon Wallace welcomed the move, saying it gave airlines an opportunity to pass savings on to travellers. However, he said passenger security levies were only part of the story, calling for greater scrutiny of airport charges, a review of Airways’ levies and further savings to relieve an industry hit by sharp fuel cost increases.
Targeted consultation with parties including Air New Zealand, Jetstar and the Airports Association runs until noon on 14 October.