Air New Zealand to raise fares

By CHRIS DANIELS

Air New Zealand is about to announce another fuel-driven ticket price increase as world oil prices continue to climb.

The airline has followed Qantas closely when it comes to imposing fuel surcharges, and its Australian rival announced more price rises last week.

Air NZ chief executive Ralph Norris said in Singapore the airline would "probably" increase its fuel surcharge. A decision would be made this week.

In August, Air NZ said that based on prices then fuel would cost it more than $600 million after accounting for hedging and foreign exchange movements this year.

This was up 25 per cent from last year's $480 million.

Customers on Air NZ's regional Link services now pay a $6 surcharge a one-way trip. The charge is $10 on domestic main trunk jet flights.

Transtasman and Pacific Island flights charge a $22 a sector surcharge and long-haul flights $26. Flights from Auckland to London have a $44 surcharge.

Qantas announced a fuel surcharge of A$6 ($6.35) a sector for domestic travel and A$15 a sector for international travel in May.

It increased the fee in August, to A$10 a sector for domestic travel and A$22 a sector for international flights.

Surcharges go up again from today to A$12 for domestic flights and A$29 internationally.

The airline reacted angrily to criticism of last week's announcement of more surcharge increases this week.

Chief financial officer Peter Gregg said comments by an ABN Amro analyst were "malicious as well as stupid".

Analyst Anthony Srom had described the surcharges as "money for jam" and "largely unnecessary".

Gregg said every airline in the world had found it necessary to impose surcharges.