For the past several years, TDB has been providing independent expert advice to the Board of Airline Representatives New Zealand (BARNZ). This support has been focused in part on the Commerce Commission’s 7-yearly review of the Input Methodologies (IMs) for Airport Services. The IMs provide NZ’s regulated airports (Auckland, Wellington, and Christchurch) with guidance on the rates of return on capital they can include in their pricing models used to determine charges applied to airlines for aircraft and passengers using airport facilities. The Commerce Commission issued its latest IM determination in December 2023. In July 2025, the High Court in Wellington heard an appeal that the NZ Airports Association and the three regulated airports lodged against this determination.  The Commerce Commission was the respondent in this appeal, while BARNZ along with Air NZ and Qantas were Interested Parties.

The primary argument the airports brought to the appeal was that the Commerce Commission (i) should have maintained a relatively large sample of comparator airports, as used in the past, for measuring the asset and equity betas that form part of the cost of capital estimate; and (ii) should have measured the betas as a simple average over the last two five-year period, again as in the past. In contrast, the Commission – in a position supported by TDB and the airlines – had significantly reduced the number of comparator airports to reach a sample that it felt was more representative of NZ airports; and had taken into account the sharp increase in betas during the Covid-affected period of 2020-22 by adopting a methodology proposed by TDB – the Flint methodology – that better reflected the prospective future incidence of Covid-like events.

In his decision issued in December 2025, the judge definitively rejected all the arguments brought by the airports. In doing so, he echoed key points that the Commission, the airlines, and TDB had made before and during the court hearing:  the need for the Commission to use its best judgement and discretion in reaching an IM determination; to take into account not just the latest data but also changes in circumstances (like Covid) in reaching its decisions; to be forward-looking in its determination, setting out the most appropriate IMs for the next regulatory period; and, in doing so, not to be rigidly bound by the precedent of past practice. Overall, he made it clear that the airports had not provided data or arguments that would lead to an alternative, materially better, IM.

Following the Court decision, the Commerce Commission is proceeding with its plan to address some computational errors it acknowledged making in the original IM determination. It will be seeking submissions from the airports and airlines as part of this review, and TDB will continue to provide advice to BARNZ through this process.