Survey Shows NZ Airfares Continue To Rise

American Express Survey Shows NZ Airfares Continue To Rise

Auckland, December 11, 2000 – New Zealanders will have to shop around carefully to find a bargain flight this Christmas, according to a survey of airfare movements by American Express.

Discount economy airfares for New Zealanders have risen 5.1% in the final quarter of this year and are up more than 10% for the whole of 2000, according to the American Express Asia-Pacific Airfare Index.

The survey, by the world’s largest travel agent, shows New Zealand air travellers have experienced the biggest rise in airfares of any country in the Asia-Pacific region – both during the fourth quarter and throughout the whole of 2000.

Airfare prices are being pushed up by rising international jet fuel costs and the impact of a steady decline in the value of the New Zealand dollar against the United States currency, American Express said.

Almost all types of airfares have risen for New Zealanders. As well as the increase in discount fares, full economy airfares in New Zealand rose 5.4% for the latest quarter and 10.8% for all of 2000, while Business Class fares rose 3.8% for the quarter and 8.6% for the year.

The only brightspot in the latest airfare index is that First Class airfares from New Zealand fell 1% in the latest quarter, and have risen a relatively moderate 1.6% for the full year. The decline in First Class airfares coincides with the launch of the American Express Platinum Card in September, which offered special airfare incentives for Cardmembers on First and Business Class flights.

While the airfare increases are going to be difficult to avoid, American Express is advising travellers to shop with a reputable travel agent to find a good deal.

“When the market is as difficult as this, it is important to shop with a substantial agent who will be able to find the best available fare,” said American Express Corporate Affairs spokesman Mark Reynolds.

“It is times like this that a good travel agent can really make a difference, even for short-distant flights,” he said.

Mr Eric Meierhans, director of American Express Consulting Services, says the overall index for the Asia Pacific region has increased rapidly over the year in all airfare classes. This is a huge difference to the reasonably stable fares that were occurring in 1999.

“High oil prices and low currency exchange rates to the US dollar have been the main contributors to the increase of airfares right throughout the year,” Mr Meierhans said.

“Oil has remained above US$25 per barrel since January, and has been mostly above US$30 since June. The high prices have increased the cost of doing business for airlines, and they are passing these costs on to their customers.

“Both the Australian and New Zealand dollars are buying 16% and 22% fewer US cents, compared with a year ago. This further increases the local currency cost of aviation fuel, as well as increasing a number of other airline costs, such as leasing and debt.

INDIVIDUAL MARKET RESULTS

New Zealand

Airfares from New Zealand experienced considerable changes during the fourth quarter. First Class fell 1.0% due to a reduction on some trans-Pacific routes. Business Class increased 3.8% and Full Economy increased 5.4%. Discount economy increased rapidly, up 5.1%. Throughout 2000, the Full and Discount Economy indices both increased more than 10%.

Australia

Airfares from Australia only increased by small percentages in all classes over the last quarter. Business and Discount Economy both increased 0.6%, full economy increased 0.5% and first class increased 0.3%.

Singapore

First Class airfares from Singapore increased 1.4% in the fourth quarter and 7.2% over the past year. Business Class airfares increased 1.6% in the quarter and 9.7% during 2000. Full and Discount Economy also increased 1.6% this quarter.

Taiwan

Full Economy airfares from Taiwan increased 0.9% during the quarter. All other airfare classes were unchanged.

Hong Kong, India, Indonesia and Japan

Airfares from these countries only increased by small percentages in some classes during the fourth quarter.

Malaysia, Pakistan and Thailand

Airfares remained unchanged across all classes during the fourth quarter.
About the Index

The American Express Asia Pacific Airfare Index is published every quarter as a guide to airfare changes and trends in the Asia Pacific region. It is produced exclusively for American Express by Access Economics. The Index surveys 947 published airfares across 165 city-pairs throughout Asia Pacific, available for purchase on the first day of the quarter.

As well as providing critical analysis of airfare trends in the region, the Airfare Index assists organisations to measure and keep track of their performance in terms of business travel expense management.

Each edition of the Airfare Index measures data across six fare categories including First Class, Business Class, Full Economy, Discount Economy, Lowest Peak-Season Excursion and Lowest Off-Season Excursion. The countries covered by the Index are Australia, Hong Kong SAR China, India, Indonesia, Japan, Malaysia, New Zealand, Pakistan, Singapore, Taiwan and Thailand.

Class Definitions

First Class – The lowest, generally unrestricted first class fare valid for simple itineraries eg a city-pair return trip.

Business Class – The lowest, generally unrestricted intermediate-class fare valid for simple itineraries.

Full Economy – The lowest, generally unrestricted economy class fare valid for simple itineraries.

Discount Economy – The lowest economy fare available to the business traveller. Seats may be limited and an advance purchase of up to seven days may be required. No minimum stay requirement. A cancellation penalty may apply.

American Express Corporate Services, which includes the American Express Corporate Card, and Corporate Travel Services, assists companies in managing and controlling their business travel and entertainment expenses. It is a unit of American Express Travel Related Services Company, Inc., a wholly-owned subsidiary of American Express Company – a diversified worldwide travel and financial services company founded in 1850. It is a leader in charge and credit cards, Travellers Cheques, travel, financial planning, investment products, insurance and international banking.

For more information, please contact:

Mark Reynolds
Public & Corporate Affairs
American Express
09 3674370

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