KEY POINTS:
Air New Zealand today announced a range of fare hikes and route changes, mainly cutbacks, in response to the continued high cost of fuel and changes in demand.
The price of domestic airfares will rise by an average 4 per cent as will international airfares sold in New Zealand, Australia and the Pacific Islands.
Domestic and short haul international increases are effective from June 16 with long haul expected from June 20.
"With jet fuel remaining at very high levels it is critical we adapt our business in response, including fare adjustments to recover these significantly increased operating costs," chief executive Rob Fyfe said.
"The airline industry faces sizeable challenges in this rapidly changing economic environment and we continue to review all aspects of our business including fares, network and costs."
The route changes include:
* Reducing services by one per week between Japan and New Zealand during the lower demand months of September, October (from nine to eight per week) and November (from 12 to 11 per week).
* Removal of the twice weekly Auckland-Hong Kong service operated seasonally during December and January. Hong Kong will continue to be serviced with its year round capacity of a daily 747-400 operating Auckland to London via Hong Kong.
* As a result of continued strong passenger demand, from October several Auckland to San Francisco services per week will be increased from a 313-seat 777-200 aircraft to a 379-seat 747-400.
* Capacity on the Tasman will be cut during lower demand months. Between August and November services from Hamilton to Sydney will reduce from three to two per week, and between September and November services from Dunedin to Sydney will reduce from three to two per week.
* Services on both Tasman routes will return to three per week from late November. Services between Wellington and Sydney during August will reduce from a total of 44 to 36.
"As a small, nimble operator we have the benefit of being able to quickly adjust schedules to maintain a cost effective operation that ensures capacity meets current demand in the markets we serve," Mr Fyfe said.
Air NZ shares were unchanged today on $1.16.
- NZPA
