New Zealand's largest airport could face pricing controls after a competition report found it was over-charging for services.

The Commerce Commission has concluded that Auckland airport, which handles around 70% of New Zealand arrivals and departures, made about NZ$4m (�1.16m; $1.80m) more profit than it should have last year through inflated costs.

The commission did not call for controls on the country's other two airports - Wellington and Christchurch - but said a virtual monopoly had been created, making it difficult for competitors to enter the market.

The report is now with the NZ government which will decide by December whether to set limits.

Excess Profits

The services criticised in the investigation include runway maintenance, emergency services, air traffic control and security.

They did not include other activities within the airport such as retailing and parking.

Auckland airport bases the cost of these services on the value of its assets.

But the commission estimated that the airport's asset base had, because of unrealistic estimates of land values, been overvalued by as much as NZ$189.9m (�55m).

The airport's size leaves airlines little choice but to pay the set charges.

If price controls were imposed, the commission said airlines would save up to NZ$2m a year.

Uncertain skies ahead

Auckland airport, a private company listed on the New Zealand stock exchange, has argued against the price controls.

But the report has already knocked its shares, and prompted airlines to negotiate lower charges at other airports.

The commission did not explain what kind of controls might be introduced.

But Air New Zealand - the country's largest airline - has already said it will use the inquiry for talks with both Wellington and Auckland airports.