Last week Air New Zealand announced that it was on track for its second highest full -year profit.
Pretax earnings fell to $323 million in the six months ended December 31 from $349 million in the same period a year earlier but it raised its dividend to 11c, a 10 per cent increase on the prior period and a record interim payout.
Passenger revenue reached an all-time record for an interim result, at $2.3 billion. The airline continues to perform strongly in the domestic market — where the new charges apply — with about 80 per cent of those carried internally.
It will increase capacity in the domestic market by 6 per cent in the current half year.
Seat plus bag fares on Air New Zealand allow one checked-in bag up to 23kg. On Jetstar a seat plus a 20kg bag is $11.
Air New Zealand's Flexi Time fares allow a bag and a change of flight time on the day without charge. Flexi Plus all a change of the day of the flight, time, destination or origin, depending on availability.
ATPI Business World Travel managing director Grant Bevin said the Flexi fares were very popular with corporate travellers.
He said the extra charges were ashame for customers but he could understand why Air New Zealand had done it.
''That's how good customers make money.''
House of Travel commercial director Brent Thomas said he didn't think the extra charges for bags would deter passengers from travelling. The airline was facing higher fuel charges and this was one way of recovering the extra cost of carrying bags.
He advised travellers to be wary of trying to save by not checking in bags and packing more into hand luggage. There had been a crackdown on overweight hand luggage at the airport and passengers ended up paying much more if they had to check it in.
IdeaWorksCompany a consultancy on airline ancillary revenues, and CarTrawler estimated airline total ancillary revenue at US$57 billion worldwide for 2017.
Eight years ago this was $14b.
"The huge increase of 308 per cent for a la carte revenue since 2010 offers testimony to the growing popularity of the low cost airline model and the a la carte approach to pricing. Be it global network airlines like Emirates in the Middle East, ancillary revenue champions such as AirAsia and Ryanair, and even traditional airlines like TAP Portugal, all are becoming better retailers to encourage consumer spending,'' said Aileen McCormack, CarTrawler's chief commercial officer.
Air New Zealand does not break out its ancillary revenue figures.
