Fuel costs push up Air NZ fares

Air New Zealand is again lifting its ticket prices, citing soaring jet fuel costs.

It will increase its "fuel surcharge" from next Tuesday, with the levy on a flight to London now pushing $100.

Marketing general manager Norm Thompson said the cost of fuel - judged by the benchmark Singapore Jet Fuel price, was 80 per cent higher than in April last year, and around 15 per cent higher than in October, when the surcharge was last increased.

The airline's fuel bill is expected to be more than $600 million this year, up from $482 million in 2004.

Fuel accounts for about a fifth of Air NZ's costs and Mr Thompson said recent price increases had been absorbed for the past few months, in the hope they would "track back down toward long-term averages".

It now looked like prices could stay at these levels or even higher for a more extended period.

He said the airline was committed to reducing the surcharge when prices began falling.

Higher ticket prices do not seem to be deterring people from flying, if Air NZ's own passenger statistics are anything to go by.

For the month of February, the Air New Zealand Group flew 4.8 per cent more passengers than the same month last year.

The airline said its cargo rates were under review and other airlines, including British Airways, Thai Airways and Virgin Atlantic had all increased fuel surcharges in the past two weeks.

* Domestic airfares on Air NZ's "Link" flights will increase by $5 per one-way journey and the main trunk jet services are going up $10 per one-way trip.

* Transtasman and Pacific Island flights will increase by $12 per sector, which takes the fuel surcharge from $30 to $42.

* Long-haul flights (to Asia for instance) will incur a $52 per sector fuel surcharge, which is also a $12 increase.

* The fuel surcharge on Air NZ's Auckland-Los Angeles-London service will increase $22, taking it to a total of $92.

These international price rises are applicable to all tickets sold in New Zealand.

Air NZ said flights booked and paid for before April 12, for travel after that date, will not be subject to the higher fares.