Air Chathams adds $20 surcharge on flights as global jet fuel price soars

Whanganui passengers will have to pay a $20 base surcharge for each flight segment. Photo / NZME

Air Chathams has joined airlines around the world in price increases amid global jet fuel price hikes.

On Wednesday, Air Chathams introduced a $20 base surcharge for each flight segment, as ramifications of war in the Middle East reverberate.

Chief executive Duane Emeny said the surcharges would be reviewed regularly but overall did not go far enough to cover the increase in the airline’s jet fuel prices.

“It might be an additional $40 for a return journey for one passenger but when you’re talking about a family of four, it becomes a bit more substantial, right?

“That’s why we’ve kept it at $20, which is a reasonably small amount when you compare it against the cost of fuel increases.”

Infant fares, pre-paid vouchers and package deals are exempt from the surcharge.

All surcharge profits would go towards fuel purchases and if jet fuel prices returned to previous levels, the airline would be able to remove the surcharge.

It was easier to implement a surcharge than a total fare increase, Emeny said.

“It’s a bit more technical and takes longer to implement and remove. So, with the surcharge, as soon as we feel that pricing’s normalised, we can pull it straight away.”

The airline serves travellers from Auckland, Whanganui, Christchurch, Chatham Islands, Pitt Island, Kāpiti, Wellington and Whakatāne, connecting about 140,000 passengers every year, according to its website.

Emeny said the company received its revised fuel pricing two days ago, which revealed a GST-exclusive increase of 83 cents a litre for Whanganui airline pump costs – with no notice period, despite its previous supply arrangements and pump discounts.

Air Chathams was now considering revising flight frequencies, such as by rearranging passengers’ flights.

“It seems to be changing day by day. So we don’t want to panic, react and put something in place and then just have to pull it off straight away,” Emeny said.

It was “quite good” to hear the International Energy Agency had released 400 million barrels of oil, he said.

He was also impressed with the Government’s newly established Ministerial Economic Security and Supply Chains Group, an oversight group focusing on fuel and key supply chains.

Fuel turnover was significantly lower for aviation than for road users, with tankers coming through every month or two to refill airline fuel supplies.

“So I just don’t understand why we’re paying high prices for old stock. That’s something that I’d like the Government to ask ... the suppliers.

“If this thing goes longer than a month, then the Government should be looking at mechanisms that they can control that could alleviate cost pressure for airlines.

“Through Covid, they were able to effectively pause those costs to support the industry. So I don’t see this being too much different.”