KEY POINTS:
Bargain air fares across the Tasman are highlighting the large chunk airport charges, taxes and agency levies make up of ticket prices.
Air New Zealand figures show $161 of an Auckland-Sydney fare comprises charges on both sides of the Tasman.
Promotional fares have been dipping under $300 this year on the highly competitive route which has been flooded by capacity.
Air New Zealand Tasman Pacific general manager Glen Sowry said while airlines were engaged in cut-throat price wars, the "invisible" charge component kept on going up.
"Ultimately for the consumer it's up to them to consider whether it's good value or not. Our view is that it's not." On some transtasman tickets the airline's revenue was just on $75 per sector.
Sowry, who is also president of the Board of Airline Representatives, said carriers were very focused on working with airport companies, border agencies and government departments to limit cost increases.
"Air New Zealand is concentrating on all aspects of our operation to ensure we're as cost effective as possible - then you have these situations where a significant portion of the ticket price is in taxes, levies, this that and the other which are in almost every case being provided by monopoly service providers."
Pacific Blue's general manager commercial Adrian Hamilton-Manns said the external charges needed to be reviewed given the economies providers were realising with more people travelling. "They are effectively milking guests, which we don't think is fair."
JetStar is also critical of the extra charges imposed. The airline is expanding its New Zealand operation from Christchurch to Auckland with transtasman flights due to start late in April.
Chief executive Bruce Buchanan said there needed to be greater border harmonisation to make transtasman flying like internal travel. He said costs could be reduced by up to 20 per cent with such streamlining.
House of Travel sales director Brent Thomas said as a proportion of ticket prices, charges had never been higher.
"There's no doubt about the average customer would not be aware of how much their total tickets cover airport and other costs that are imposed on the airlines."
Charges worldwide have been pushed up by stringent security at airports since the 2001 terror attacks.
New Zealand Civil Aviation Authority figures show revenue from passenger service charges jumped from just over $57 million in 2007 to just under $80 million last year. But the CAA notes in its annual report that its $16 million surplus in 2008 was boosted by the lower-than-expected spending on aviation security.
General manager of the Aviation Security Service, Mark Everitt, said the $15 charge out of Auckland helped subsidise services in small regional airports. The service was reviewing efficiencies in its operation over the next few months to try and cut costs.
He said one priority was keeping an infrastructure in place at Hamilton and Palmerston North airport's after the withdrawal of Air New Zealand's international services, should a replacement airline fill the gap.
Airlines have for years been at loggerheads with Auckland Airport in particular over landing fees and other charges it use mainly to fund development.
The airport's aeronautical chief operating officer Tony Gollin said passengers should look at the total cost of a holiday.
"Looking at the total cost of the travel plus all the other costs associated with it - accommodation and rental cars - the airport charges and government charges are a very small part of it. Like it or not or not there are costs that need to be recovered."
