Buses back in favour as rising fuel prices hit flights harder
Thursday, 16 April 2026
The Post’s Under The Pump series investigates how the global fuel crunch is disrupting New Zealand businesses - but more importantly, how they’re planning to survive.
National bus company InterCity says it has increased fares in the face of an escalating diesel price, which has hit $4 a litre as the Iran war grinds on - but more people getting on buses had helped to soften the blow.
“In most cases, our passengers might be paying a couple of dollars more than they would have before the conflict began,” said Sam Peate, chief operating officer of the company.
But the rise in airfares is hurting more, and so taking a bus between some cities was increasingly attractive option, Peate said.
The average InterCity passenger travelled on a three to four-hour journey, such as Auckland to Rotorua or Taupo, Peate said. A trip from Auckland to Tauranga booked a day before cost $54 for a standard seat and $64 for a Gold or premium seat. Wellington to Auckland on a Friday cost $59 for a standard seat and $127 for Gold seat.
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The company does add a fuel surcharge due to fluctuating fuel prices, which is not part of the base fare but is specific to the service and the route.
However, there are factors besides price to consider.
“When you factor in the alternative of flying, by the time you've driven to the airport, checked in and boarded your flight and then de-planed at the other end, and then get to your destination, it's actually quicker to go by coach, because you're going right into the city centre.
“That is a big factor for us, and in terms of converting some of those passengers who have been impacted by increases in airfares and flights being cancelled,” Peate said.
Ticket sales had gone up by about 20% to 30% since the beginning of March, when petrol prices started rising after the Iran conflict started, Peate said.
South Island loads were busy because of the return of tourism, but the North Island services were also picking up, he said.
“Our goal is to retain that passenger growth once oil prices come down.”
As far as its own fuel requirements went, Intercity was being told by its fuel suppliers that New Zealand had a “price problem, not a supply problem” and that was consistent with government briefings.
The Government recently sought feedback on which industries would be classed as critical if the country had to move up a level in the fuel response framework, and the company had positioned itself as providing transport accessibility at a time when flying became more difficult.
Formerly a government-owned bus network, InterCity was purchased in 1991 by private interests and is now owned by the Entrada Travel Group, which is in turn owned by the Ritchie Family of Ritchies Transport, and the Snelgrove family, owners of Tranzit Group. There are 600 destinations throughout the country on the network.
On average the network operated about 130 services per day and on any given day carried between 1000 to 5000 passengers, depending on school holiday or the day of the week, using a fleet of about 50 coaches.
On average, the buses were running a little over 80% full, leaving some room for growth.
Higher diesel costs had led to the company to review the option to run electric buses in some parts of its network.