Air New Zealand raises fares as petrol price eases

By MATHEW DEARNALEY

Air New Zealand is pressing ahead with another fuel-driven fare rise even though petrol and diesel prices eased yesterday.

The airline will raise fares by between $4 and $36 next Tuesday.

It says its forward fuel purchases at discount prices can offer only limited protection against the increasing cost of crude oil in international markets.

Surcharges will rise from $6 to $10 on one-way regional Link flights, and from $10 to $15 on main-trunk domestic services.

International passengers will pay $8 more a sector when flying to Australia or Pacific islands, $14 more for flights to Asia or the United States, and $20 more from Los Angeles to London.

This will lift the total fuel surcharge from Auckland to London via Los Angeles from $44 to $70, and follows Qantas increases last week.

Air NZ marketing chief Norm Thompson said forward fuel purchases had so far cushioned customers from the full impact of rising costs, which were a heavy burden for airlines worldwide.

Petrol prices, meanwhile, eased yesterday, off a 10-year high reached last week from two increases.

This followed a reduction in world oil prices in response to indications that high energy costs were slowing the economic growth that fed this year's jump in fuel demand.

But motorists were last night still paying 3c a litre more than a week ago, even after prices dropped 2c to $1.239 for 91-octane petrol at most main-centre pumps and $1.289 for the less popular 96-octane.

Diesel users are only 1c better off, after a price cut to 83.9c.