Air New Zealand defends fares between Auckland and Wellington

Air NZ is charging one-way fares above $400 between Auckland and Wellington. Photo / Mark Mitchell

Air New Zealand is defending its fares in the face of criticism of one-way fares hitting $400 each way between Auckland and Wellington.

The airline says it regularly monitors fares to ensure they "remain affordable".

"Pricing is strongly influenced by supply and demand, however, we regularly monitor fares and routes to make sure our fares remain affordable. Naturally demand is higher for travel at certain times of the day (for example first thing in the morning) and particularly at this time of year," said a spokeswoman.

Read More

• Covid 19 coronavirus: Singapore Airlines to cut jobs in New Zealand - NZ Herald
• Flight path: How airlines can climb out of Covid crisis - NZ Herald
• International Air Transport Association warns of devastation for airlines as outlook worsens - ...
• Photos: Inside Sehion Tours chartered Singapore Airlines flight from Kochi, India to Auckland -...

There were more fare options at different times of the day.

Travellers on Twitter this week have complained of some "outrageous" fares for flights between Auckland and Wellington, the busiest route for business and government passengers.

And Consumer NZ says the airline's fares are a regular source of complaints and there was suspicion about how prices were set.

A check of websites yesterday for Air New Zealand and Jetstar show a big contrast in fares for carry-on only.

Booked two weeks out, fares for a round trip on Monday, December 14 at typical times from commuters on Air New Zealand ranged from $159 to $189 from Auckland to Wellington. The evening return flights ranged from $219 to $304.

Jetstar offers fewer flights but Auckland to Wellington flights in the early morning ranged from $65 to $75 and the evening return ranged from $75 to $85.

The Air New Zealand spokeswoman said demand was far more variable since Covid-19 hit.

Flights have regularly been departing half full, or bookings being made very late and selling out.

''In response to strong late bookings, our first priority has been to add capacity wherever possible which makes more seats available at lower fares.''

In November it added more than 26,000 seats to the network for travel in the same month in response to high demand, either by adding new flights or deploying larger aircraft on existing routes.

Many of these seats were added to the Auckland-Wellington route.

The airline - which plunged to its first loss in 18 years in the last financial year - had released more than 550,000 fares for under $100 for travel between December and February.

While business travellers often book late and need to travel at the morning and evening peak, Air New Zealand says that if they were flexible about the time of day they travel they could save on fares.

"Naturally our cheaper fares tend to sell out fastest, which is why we encourage customers to book early to take advantage of the best available fares, especially heading into the busy festive season," she said.

The airline had different fare buckets to manage availability so that seats are able to be booked at the last minute for occasions when people need to travel immediately.

Consumer NZ chief executive Jon Duffy agreed it was best to book early but that wasn't always possible.

He said the airline ran algorithms that meant "dynamic pricing" and consumers were suspicious of "price discrimination" where they will get a different fare pushed at them depending on browsing and buying behaviour.

There was a need for more transparency over how fares were set, particularly as the airline, 52 per cent owned by the taxpayer, had a monopoly on many routes. Air New Zealand had some ground to make up with regaining the trust of the public.

Air New Zealand pre-Covid has about 80 per cent of the domestic market but has scaled back its domestic operation. Latest operating statistics (for October) show the airline carried 672,000 passengers that month, down 25 per cent on the same month last year.

Capacity measured by available seat kilometres was 443m, down 15.2 per cent on last year. Load factor was 8 per cent down on the same month last year.

Jetstar in November was operating 63 per cent of its pre-Covid schedule now on main trunk routes after pulling out of the regions last year.

It is working towards operating 94 per cent of its schedule in the second half of this month.

Air New Zealand has support from a tourism group.

Tourism Industry Aotearoa chief executive Chris Roberts said the airline was operating in enormously challenging circumstances.

''As with other tourism operators around the country, the absence of international visitors [who normally make up around 20 per cent of domestic seats] is having a real impact on Air New Zealand's bottom line.''

He said that for airlines to operate routes that were sustainable, they required consistent demand from passengers and pricing structures that allowed them to run profitably.

''The reality is that airfare options, both domestic and international, are not likely to return to pre-pandemic patterns for the foreseeable future.''