Air New Zealand set to increase domestic airfares
Monday, 22 April 2024
Air New Zealand is increasing its domestic airfares from Tuesday.
Acting general manager domestic Jeremy O’Brien said “like many Kiwis and businesses, Air New Zealand has faced increasing costs over the past couple of years.
“As we’ve previously signalled, our cost base has risen by more than 30%, and, to date, we’ve absorbed as much of this as we can. However, to reflect the higher cost of providing air services, we need to continue to review our pricing.”
The rate of increase, which comes into effect April 23, has not been disclosed.
Stats NZ data from March showed domestic airfares went up 7.4% in February compared to January 2024 and increased 7.7% from February 2023.
In March, the airline said its February domestic fares were up 2% year on year, which was below inflation and the increase in operating costs.
“That’s why we’re taking steps to ensure our fares cover the cost of travel so we can continue to fly Kiwis across the country.”
The airline has also expressed concern at the cost of Auckland Airport’s redevelopment, saying it would make flying unaffordable - a claim Auckland Airport disputes.
A spokesperson for the airport said earlier this year Air New Zealand had strong commercial incentives to oppose airport investment, and had raised its domestic prices by 55% or $70 a fare post-pandemic.
“This has significant impact on airfares, particularly in the regions. Regional airfares grew 16% between 2022 and 2023 alone. Today airfares across the domestic market remain 32% higher on average compared to pre-pandemic,” the spokesperson said.
“New Zealand has one of the least competitive domestic markets in the world and we encourage the Government to follow Australia’s example and actively monitor fares and performance of the market to ensure it is working in the interests of consumers.”
NZ Airports Association (NZAA) chief executive Billie Moore also wanted domestic airfares and airline performance to be monitored to provide greater transparency for consumers, amid record-high domestic fares.
Moore said the airline is blaming Auckland Airport for its cost increases “when it’s their own record-high domestic airfares and cost add-ons that are driving up the cost of domestic travel for consumers. Airport charges only make up a fraction of a ticket.”
Air New Zealand also announced on Monday it will be making changes to its short-haul flight booking options.
All passengers, including those in the cheapest seats, will be offered a snack and have access to the full entertainment offering on its flights to Australia and the Pacific Islands.