Domestic and Tasman fare increases

17 March 2008
Media Release

Domestic and Tasman fare increases

Air New Zealand’s domestic, Tasman and Pacific Island fares are about to cost more as a result of high fuel prices.

Group General Manager Short Haul Airlines Bruce Parton says the cost of fares in all three markets will rise by an average of three percent for travel booked from Wednesday, March 26.

Mr Parton said that Air New Zealand regretted having to increase fares to at least partially recover some of the fuel increases. It had shielded customers for as long as possible from soaring fuel prices through its fuel hedging programme, he said.

“When domestic fares were last increased due to fuel costs in May 2006, the price of Singapore jet fuel per barrel was USD$87. Today it has reached USD$130 with a USD$10 increase in the past month alone. This recent price escalation has left Air New Zealand with little option but to increase fares. A decision on the scale of long haul fare increases is expected to be made within the next fortnight.”

Mr Parton said that while the airline remained committed to everyday low fares, it could not rule out further fare increases if fuel costs do not drop.

Mr Parton said Air New Zealand had worked hard over the past two years to minimise operating costs and this had been a significant contributor also to shielding customers from fare increases.

“Our challenge remains to ensure that we continue to drive costs within our control down, and keep prices as low as possible through our innovative initiatives like grabaseat, which offers fares as low as one dollar."

ENDS

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