* Airport regulator proposed revenue shift
* Flughafen Zuerich CEO fears investments at risk
* Regulator says Zurich airport's projects are secure
By John Miller
ZURICH, Nov 12 (Reuters) - Flughafen Zuerich shares tumbled on Monday after the Swiss airport operator said a proposal by regulators could trim its revenue by 150 million Swiss francs ($148.7 million) annually and jeopardise future investments.
The shares dropped more than 16 percent at 1300 GMT, pushing them to their lowest level in two years.
The regulator, the Swiss Federal Office of Civil Aviation (FOCA), disputed Flughafen Zuerich's estimated financial impact and contended its plan protects the company's ability to invest.
Under the proposal, FOCA intends to channel more of the money Flughafen Zuerich generates from unregulated commercial activities including duty-free, restaurants and parking to help offset airport charges set by law like those on passengers, landings and freight.
Flughafen Zuerich Chief Executive Stephan Widrig blasted the proposal as "baffling", arguing it would weaken his company's ability to invest while padding profits of airlines that would simply pocket money from reduced fees.
"The chief beneficiaries of these measures are the airline companies, while passengers stand to gain nothing and the airports will lose out on substantial funds for important investments," Widrig said.
Flughafen Zuerich served nearly 30 million passengers in 2017, up 6.3 percent from the year earlier, and is among Europe's ten biggest airports, it said.
Privatised in 2000, it remains under FOCA's oversight, with a formula in place to ensure the Swiss-listed company can cover its costs and generate a return for investors while ensuring the important transportation hub's integrity.
FOCA began reviewing the Swiss law governing airport fees in 2016, and concluded an adjustment was called for because the allowed return on investment being generated by Flughafen Zuerich was no longer justified based on costs it had to cover.
On Monday, the regulator disputed Widrig's contention that the proposal puts critical projects at risk.
According to its analysis, FOCA said the total to be shifted is significantly lower than the 150 million francs cited by Flughafen Zuerich, though it did not release its own figure.
"Based on our calculations, Flughafen Zuerich will be able to realise its investment plans with its future cash-flow generation," a FOCA spokesman said. "The investments are secure."
The proposal, intended to take effect from September 2019, is not yet final and is subject to a comment period where stakeholders including the airport operator and airlines can weigh in. Switzerland's seven-member government still must approve any plan.
$1 = 1.0089 Swiss francs Reporting by John Miller; Editing by Michael Shields