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Air NZ domestic fares to increase by 5pc due to ‘operational cost pressures’

Air NZ domestic fares to increase by 5pc due to ‘operational cost pressures’

An Air New Zealand spokeswoman said it was raising domestic airfares by 5 per cent because it was unable to continue absorbing “operational cost pressures” such as labour, fuel, goods and services.

Jetstar spokesman Phil Boeyen said it had “nothing to report” in regards to raising airfares.

Operational costs, in particular fuel, were regularly reviewed by Jetstar, he said.

“It’s something that we constantly monitor,” Boeyen said.

“We are keeping an eye on it.”

An Air New Zealand seat plus bag airfare from Auckland to Christchurch return, booked a month from now, currently costs $158.

A 5 per cent increase would add another $7.90 to the airfare.

Aviation commentator and former Aviation New Zealand chief executive Irene King said Jetstar would “absolutely” follow suit.
“Their cost base is really no different to Air New Zealand,” King said.

The weakening New Zealand dollar against the US dollar would be in part to blame for the airfare increase, she said.

The kiwi dollar has fallen about 5 cents against the greenback this year to currently trade at about 69 US cents.

“Airlines pretty much trade in US dollars so the cross rate is really important.”

A weakening New Zealand dollar makes it more expensive to buy fuel, which itself has been increasing in price.

Last week US oil prices pushed past the US$70 (NZ$99) a barrel mark for the first time since late 2014.

King said while a 5 per cent hike in airfares was “just a shiver” it could affect travel decisions made by some families where driving was an option over flying.

Auckland-Whangarei, Auckland-Taupo and Auckland-Tauranga were routes where families might decide to drive instead of fly, she said.

“On some of those shorter routes people may decide to take the car rather than fly.”