Air New Zealand increase fares to cover fuel cost

Air New Zealand is increasing airfares by as much as 8 per cent on average because of the rising cost of jet fuel.

From March 18, domestic airfares will increase by an average of 7 per cent, fares to Australia and the Pacific Islands will increase by an average of 8 per cent and long haul fares will increase by an average of 7 per cent.

DOMESTIC
Airfares sold in New Zealand for domestic flights will increase by an average of 7%;
- Direct Smart Saver fares will increase by approximately $10 one way
- Direct Flexi Plus fares will increase approximately $15 one way
- Indirect Smart Saver fares will increase by $15 one way
- Indirect Flexi Plus fares will increase by $20 one way

The airline said that in the past month jet fuel has increased from $US114 ($NZ155) per barrel to $US130 per barrel, adding almost $US10 million per month to the airline's operating costs.

Earlier today, Qantas said it would again increase fuel surcharges on international flights on tickets issued on or after March 17.

It said oil and fuel prices were an increasing concern for the aviation industry and its surcharges would not recover the full impact of the latest oil and fuel prices.

Aviation analysts have said that surcharges are a transparent way of recovering rising fuel costs compared with increasing airfares.