Cheaper travel contributes to lower CPI

International airfares are the second biggest contributor to the fall behind the drop in petrol prices. Photo / Brett Phibbs

Kiwis enjoying ‘golden era’ of travel with competition and strong dollar cutting fares.

Intense competition and more airline services have led to sharp falls in prices that are now being reflected in the latest consumer price index.

March quarter figures show that international air fares were down 15 per cent and package holidays down 6.6 per cent in the three months in what has been described as a golden era of travel.

Statistics New Zealand said cheaper fares to Europe and Asia influenced the fall in international air fares in the CPI index which fell 0.3 per cent in the March 2015 quarter, following a 0.2 per cent fall in the December 2014 quarter.

International airfares are the second biggest contributor to the fall behind the drop in petrol prices. The lower cost of oil is helping to lower air fares.

Flight Centre general manager of product Simon McKearney says this year has been good for Kiwi travellers.

"Lower fares and package holidays have seen New Zealanders having greater accessibility to really good deals and the strength of the dollar has meant [travellers' dollars] go much further on the ground."

New Zealanders are travelling in record numbers with the latest March figures showing 168,200 overseas trips, up 14 per cent from March 2014.

McKearney said best airfares to Europe were now around $1500, equivalent to around 1.5 weeks' pay, hence the "golden era of travel" tag.

Access to better fares and lower prices has also been driven by the increasing number of carriers coming to New Zealand, he said.

The number of routes from Auckland is also on the up with numbers increasing almost a quarter in 2014 compared to 2010.

This will increase at the end of the year with Air New Zealand beginning flights to Argentina and opening up a new US route, Houston. China Southern is putting on extra capacity and Philippines Airlines is studying the Auckland route.

Flight Centre says that Australia has been a top destination for New Zealanders this year. Other popular spots include; London, the Cook Islands, Los Angeles and Fiji. Bali bookings have soared with Air New Zealand's direct services over winter.

The strong figures are echoed by latest monthly data from Auckland Airport with international traffic up 13.5 per cent to 788,000.

Price drivers

• Cheaper travel is contributing to the falling CPI
• Petrol -0.51 percentage points
• International air fares -0.23
• Package holidays -0.08
• Other fuel - 0.05.