Why are domestic airfares more expensive than international?

By Aimee Shaw

NZ Herald·

11 Sep, 2016 11:50 PM2 mins to read

Why does it cost so much to travel domestically by air? Photo / Mark Mitchell

The price of international airfares are dropping like stones - so why is it still so expensive to fly a short distance to New Zealand's regional hubs?

Airfares between Europe and New Zealand have hit a record low, with Malaysian Airlines offering a return ticket to London for $1259 between the dates of April 1 to May 31 next year.

The price per kilometre for that journey works out to be roughly 6 cents per kilometre flown.

While the cost of domestic airfares has decreased slightley in recent years, the price per kilometre for an hour long flight across the country is roughly double the cost to head 18,000km to the other side of the world.

The Herald looked into the cost of flying from Auckland to five regional cities and found that the average price to fly 1km domestically was 13 cents.

Increased competition is known to bring down the cost of international flying, but Air New Zealand spokesperson Anna Cross said there are a number of other determining factors including passenger demand and fuel, airport landing and navigation costs.

"Generally speaking, larger jet aircraft have more seats and the overall operating cost per seat per kilometre is lower and shared between considerably more customers," Cross said.

As the demand for regional routes is generally lower and operate smaller aircraft, this is likely to be the reason why.

The price of travelling to Europe on premium airlines, such as Singapore Airlines and Air New Zealand has decreased 15 per cent this year, according to House of Travel marketing director Ken Freer.

"This year's competitive pricing from premium carriers is fantastic news for Kiwis, whatever your preferred travel style. When you couple these deals with favourable exchange rates, it is a great time to be a Kiwi traveller - travel just keeps getting cheaper," he said.