Airfares on the rise

Air New Zealand says it can no longer absorb increasing costs which means a rise in airfares and ancillary fees. Picture by Liam Clayton

People flying in and out of Gisborne Airport can expect to pay more for seats and luggage as Air New Zealand says it can no longer absorb increasing costs.

“Like many Kiwis and businesses, Air New Zealand has faced increasing costs over the past couple of years,” Air New Zealand domestic general manager Iain Walker told The Gisborne Herald yesterday.

“To date, we’ve absorbed as much of this inflation as we can but to reflect the higher cost of providing air services, we need to continue to review our domestic pricing which, as always, will be based on various factors including demand, type of aircraft and length of flight.

“Customers may notice increases in fares or ancillary fees like adding on a bag.

“We’re committed to offering our customers competitive airfares across a range of fare choices whilst ensuring we cover the increased costs required to operate our flights post-Covid.”

The news comes three days after Newstalk ZB reported a flight from Gisborne to Auckland was cancelled because of engineering problems.

A connecting flight from Auckland to Tauranga was also cancelled and Air New Zealand confirmed its Gisborne team organised a four-hour road service to make sure the customers got to their destination.

Last week, Air New Zealand announced interim earnings before taxation of $185 million for the first half of the 2024 financial year.

Net profit after taxation was $129 million.

A company NZX statement said passenger revenue of $3.1 billion was up 21 percent, driven by a significant ramp-up in capacity across the international network. Demand was stable in most markets but signs of softness in domestic corporate and Government demand was experienced from September.

Overall capacity was up 29 percent on the comparative six-month period.

Operating costs, including fuel, increased 21 percent due to a substantial increase in long-haul flying this year.

“Inflationary pressures also continue to be felt. Non-fuel operating costs have increased around 5 percent, or $100 million, due to price inflation, which is on top of an increase totalling 15 to 20 percent across the last four years.

“The cumulative effect of these increases is having a significant impact on the cost of providing air services, including on the domestic network, and the airline is currently reviewing fares and capacity to better reflect ongoing cost pressure.”