pilotdude09
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Air NZ Fares Rise By 10%

Fri Apr 21, 2006 3:24 pm

Yesterday they said they would wait and see yet today they put fares up by 10%

Air New Zealand has announced a 10% increase in domestic and international airfares from May 1, saying it's responding to recent significant rises in jet fuel prices.

"Fuel is now our number one cost. We regret having to increase fares but the numbers are stark," says chief financial officer Rob McDonald.

The price of benchmark Singapore Jet Fuel has more than doubled from around $US40 in April 2004 to $US89 a barrel today, he says.

This means Air New Zealand's fuel bill has risen from $480 million in the 2004 financial year to nearly $1 billion this year.

In the last month alone, fuel prices have increased by nearly $US10 per barrel, he says.

Until now customers have been shielded from much of the effect of these price rises by the airline's fuel hedging programme, McDonald says.

But recent falls in the New Zealand dollar against the US dollar and the fact Air New Zealand's more favourable fuel hedges have rolled off compound the situation and mean this shortfall must now be addressed, he says.

The airline will still not fully recover the increased cost of jet fuel from the fare rise, he says.

McDonald says the business is very sensitive to fuel price rises - every $US1 increase in the price of jet fuel forces down the airline's annual gross earnings by $US8 million before hedging.

Air New Zealand has recently made efforts to reduce costs, including a restructure of its wide body maintenance, cuts to corporate head office staff levels and combining the flying of Freedom and Air New Zealand A320 aircraft on the Tasman into one operating company.

The airline has also applied to the New Zealand Ministry of Transport and the Australian Competition and Consumer Commission to code share - or share seats - on the Tasman with Qantas to rationalise excess capacity and flying.

The company says it has saved a total of $293 million since 2003, but the magnitude of recent fuel price rises mean these cost reduction measures are now not enough.

Following a District Court ruling in November 2005, Air New Zealand incorporated fuel surcharges into its advertised prices, so the latest increase in fuel costs will simply be reflected in increased fare prices.

Air New Zealand also says it acknowledges delays in revising pricing in its internet booking system and an update of its IT systems means fuel will be included in pricing that appears in the online process from May 15.

The airline says it will continue to "rigorously monitor" its business and underperforming routes or business units are candidates for immediate review.

Source: TVNZ

[Edited 2006-04-21 08:26:25]
Qantas, Still calling Australia Home.........
 
TG992
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 3:44 pm

Quoting Pilotdude09 (Thread starter):
Yesterday they said they would wait and see yet today they put fares up by 10%

They did. They waited yesterday, and put fares up today. How does this contradict what they said?

The last sentence doesn't bode well for AKL-HNL..
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NZ1
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 5:48 pm

Quoting Pilotdude09 (Thread starter):
Yesterday they said they would wait and see yet today they put fares up by 10%

Whats your point? Stop complaining all the time would ya!!!

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777ER
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 6:38 pm

Quoting Pilotdude09 (Thread starter):
Yesterday they said they would wait and see yet today they put fares up by 10%

Yea I know NZ waited till today to announce it, awesome aye. Lets wait till QF rises their fuel surcharges.

Domestic airfares will rise by about $15.
 
ZKOJH
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 7:39 pm

thats why when I tried to book my flight for next JAN, from sydney to Auckland, most of the flights were sold out, and now have ended up being booked in Buisness class, ! (tho not Complaining at all)
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pilotdude09
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 10:53 pm

Quoting NZ1 (Reply 2):
Whats your point? Stop complaining all the time would ya!!!



Quoting 777ER (Reply 3):
Lets wait till QF rises their fuel surcharges

No complaints, didnt even have a point lol just my wording was wrong  Wink

Qantas put their fuel surcharge up yesterday, so that was probalay why NZ waited.

Quoting TG992 (Reply 1):
The last sentence doesn't bode well for AKL-HNL..

What are the loads like on this flight?
Qantas, Still calling Australia Home.........
 
Simpilicity
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 10:59 pm

fuel surcharges appear to be higher proportionally to distance of sector, on short hauls compared to long hauls. Why?

Trans tasman fuel surcharges seem to be increibly high already esp. on QF who's fuel surcharges are much higher than NZ's.
 
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Zkpilot
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RE: Air NZ Fares Rise By 10%

Fri Apr 21, 2006 11:09 pm

Quoting Simpilicity (Reply 6):
fuel surcharges appear to be higher proportionally to distance of sector, on short hauls compared to long hauls. Why?

because shorthaul op's spend a bigger percentage of their time in the climb phase than do longhaul flights (climb phase uses much more fuel) and because short haul often don't reach the same high cruise altitude... basically it means that the fuel costs are proportionally higher on short haul flights than long haul for the length of flight.
56 types. 38 countries. 24 airlines.
 
Simpilicity
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RE: Air NZ Fares Rise By 10%

Sat Apr 22, 2006 8:21 am

Quoting Zkpilot (Reply 7):
because shorthaul op's spend a bigger percentage of their time in the climb phase than do longhaul flights (climb phase uses much more fuel) and because short haul often don't reach the same high cruise altitude... basically it means that the fuel costs are proportionally higher on short haul flights than long haul for the length of flight.

sorry should have said, taking above into account ...

still seem to have 1/2 fuel shurcharge on a BNE/CHC as a BNE/LAX ...
 
777ER
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RE: Air NZ Fares Rise By 10%

Sat Apr 22, 2006 3:43 pm

Quoting Simpilicity (Reply 6):
fuel surcharges appear to be higher proportionally to distance of sector, on short hauls compared to long hauls. Why?

My guess would be because short haul uses more fuel and is less conserative then long haul

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