Targeted Amendments to Airport Cost of Capital IMs
We are considering potential amendments to aspects of the Airport Input Methodologies for cost of capital.
We are considering potential amendments to the Weighted Average Cost of Capital (WACC) parameter of equity beta for airports including:
- whether more recent data may help us better understand how the cost of capital for airports has been affected by the Covid-19 pandemic;
- the appropriate method to account for the ongoing effect of pandemics on the cost of capital for airports; and
- associated changes to the R code for calculating the parameter, given the considerations above.
We are also considering whether related WACC parameters, such as leverage and standard error, should be revisited as part of this amendment.
Background
In late December 2025, the High Court released its judgment on appeals brought by the New Zealand Airports Association Incorporated and Auckland, Wellington and Christchurch International Airports. The appeals challenged the 2023 changes to the Input Methodology rules for airports. The Court declined the appeals and found in the Commission’s favour on all three grounds.
This judgement supports our role in providing clarity and certainty around the rules governing airport pricing, service quality and transparency. During the appeals process, we committed to considering whether amendments are needed to address technical errors that the airports had identified in the R code underpinning aspects of the equity beta parameter.
Proposed time frames for this amendment
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Draft decision by the Commission |
19 May 2026 |
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Submissions due on draft IM amendment decision |
16 June 2026 |
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Cross-submissions due on draft IM amendment decision |
2 July 2026 |
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Final decision by the Commission on IM amendments |
September 2026 |
Updates and any refinements to our process steps and timelines will be published here.
Submissions
We have now published our draft decision which can be found below.
Submissions are due Tuesday, 16 June 2026.