Air NZ warns of fuel prices affecting tickets

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

Air New Zealand chief executive Greg Foran told the Checkpoint radio programme the price of fuel ‘‘has moved pretty quickly’’.

‘‘Over the past few months, we have seen effectively a doubling in price and I have 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 is about US$96,000, so that has seen the price of tickets on average increase around 20-plus per cent.’’ 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 on to passengers.

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

‘‘We have 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 New Zealand was reopening 14 new destinations over the next few weeks, Foran said.

With the school holidays a couple of weeks away, domestic routes would be back to 100% pre-Covid-19 capacity; through the Tasman and the Pacific Islands, about 75% of preCovid-19 levels; the rest of international routes about 50% of preCovid-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% and the rest of the world sitting at around 75%.’’

The airline was seeing a healthy number of bookings, which might change depending on how inflation affected 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 Radio NZ 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 many customers used this option.