Airlines operating in New Zealand could save a collective $71 million during the next six years under new plans to cut domestic and international security levies by 5%.
The Civil Aviation Authority (CAA) is consulting on the proposal following faster than expected recovery of its cash reserves.
Under plans announced by Associate Transport Minister James Meager, the domestic passenger security levy would fall from $10.91 to $10.36 and the international levy from $22.30 to $21.19 per passenger, excluding GST.
“On current projected passenger volumes, CAA estimates the proposed reduction would reduce levy collections by a cumulative $70.935 million by 2032. The impact of a saving like that for airlines and the wider aviation sector would be huge,” says Meager.
. . . Background
The passenger security levies are paid by airlines and calculated according to passenger numbers.
Any decision about whether or how a reduction is reflected in airfares, is a decision for individual airlines.
Airlines have been fighting the increase in a range of fees and levies for the last few years.
Meager says that at an individual passenger level, ‘the amount may feel modest,’ but when considered collectively the benefit to airlines of being able to invest that money elsewhere will be significant.
Improvements in CAA’s security operations and its overall financial position means it is now in the position to charge airlines less while continuing to meet aviation security expectations and performance targets, he says.
. . . Feedback Sought
The CAA is consulting with Air New Zealand, Jetstar, the Board of Airline Representatives New Zealand and the Airports Association on the proposal. It will review the feedback and then offer advice on possible levy reductions, and timing.
Meager says that maintaining effective aviation security outcomes remains fundamental.
. . . From NZ
An Air NZ spokesperson says any reduction in the cost of flying is good news for Kiwi travellers.
NZ supports the government and the CAA continuing to look at how levies and charges are set, and where costs can be reduced while maintaining aviation safety and security.
“We welcome steps that help take cost pressure out of the system and help keep flying affordable and viable over the long-term.,” it adds
