Air New Zealand warns of fuel prices affecting tickets

Air New Zealand warns of fuel prices affecting tickets
Photo credit: Getty Images

As Air New Zealand ramps up, bringing on 40,000 extra seats from tomorrow and hundreds of workers, it is warning of ticket prices being affected by fuel costs.

Air New Zealand chief executive Greg Foran told Checkpoint that the price of fuel "has moved pretty quickly". 

"Over the last few months, we've seen effectively a doubling in price and I've referred to the fact that getting to Los Angeles, it used to cost us just over US$40,000 to fill up a Dreamliner and now it's about US$96,000, so that's seen the price of tickets on average increase around 20 plus percent."

He said that was an average, but on some sectors prices could be higher "because generally the further you fly, the greater the fuel cost is, as a percentage of your ticket".

Foran said the airline was passing the majority of the fuel price increase onto passengers.

"The other thing that has a bearing on it is just how many seats we have on sectors. We've been building back as quickly as we can.

"We've now got about another 40,000 seats a week coming live on our international routes and ... part of that is going to help keep the prices down."

Air NZ was reopening 14 new destinations over the next few weeks, Foran said.

He said with the school holidays a couple of weeks away, domestic routes would be back to 100 percent pre-COVID-19 capacity; through the Tasman and the Pacific Islands, around 75 percent of pre-COVID-19 levels; the rest of international routes about 50 percent of pre-COVID-19.

"By the time we get to the end of the year, domestic, we would expect to be completely back to pre-COVID so maybe even a little bit better than 100 percent and the rest of the world sitting at around 75 percent."

The airline was seeing a healthy amount of bookings, which might change depending on how inflation affects consumers, he said. 

"At this point we are feeling in pretty good shape and the demand is quite strong."

After the interview, Air New Zealand confirmed to RNZ that the money it collected in credit charge surcharges was passed back to the bank. To avoid paying fees, customers could pay using online payment tool POLi, Airpoints dollars, or cash if booking through a travel agent.

As for seat selection costs, it said customers checking in at the kiosk could select their seat at no additional cost and a large number of customers used this option. 

"Seat selection pricing is dependent on a number of factors including your Airpoints tier status, destination and which fare you select when booking."