The Central App

Air NZ blames cost of inflation for rise in airline's airfares

The Central App

RNZ

24 April 2025, 5:15 PM

Air NZ blames cost of inflation for rise in airline's airfaresNew Zealand Airport Association chief executive Billie Moore told RNZ Air New Zealand charged high prices because they could. Photo: AFP

Air New Zealand's Chief Financial Officer Richard Thomson has blamed cost of inflation since the Covid-19 pandemic for a rise in the airline's airfares.


Thomson also told Checkpoint the airline was not price gouging.


"We are hugely sympathetic to the travelling public, I know the cots of airfares over the past three or four years has gone up significantly.


"All of our costs have gone up by the thick end of 30 percent over the last three years, and obviously to run a sustainable economic business we need to ensure that is reflected in airfares," he said.



Thomson said New Zealand had a complicated geography and was the size of Japan with a population of Sydney.


New Zealand Airport Association chief executive Billie Moore told RNZ on Wednesday that Air New Zealand charged high prices because there was no competition, and "because they can."


In response, Thomson said that was not the case.


"... New Zealand is an open sky market so it is open to competition anybody with an aircraft operation certificate can suit up in competition here."


He said their costs reflected the costs of providing their services.


"We've really worked hard to absorb as much of these cost increases as we can and keep regional and domestic airfares as affordable as we can."


Thomson said it was regrettable that flying was unaffordable to some.


He added whilst Consumer NZ had called for a ministerial inquiry into the cost of airfares, it would likely be a costly exercise and not deliver any meaningful information.


Air New Zealand's chief financial officer Richard Thomson. Photo: Supplied / Air NZ


RNZ heard from a man left home at 1.30am to drive to Auckland Airport to save hundreds on air fares, while another 18-year-old couldn't come home for his first university holidays because of the cost of flights.


This was the reality for many living outside the main centres who relied on air travel to get around, in markets with no or little competition.



Since Tauranga man Scott Koster went to the Commerce Commission about Air New Zealand's pricing, more stories of regional frustration with air travel, and the national carrier, have emerged.


Air NZ said running an airline was costly, but that didn't wash with those who relied on it to get around and felt airfares were too expensive.


Like many commuters from smaller centres, Matt Walker faces a dilemma - fly from home at great cost, or seek cheaper fares in the big centres.


"My whare is in Rotorua. I have a hybrid role where I have to travel to Christchurch once a month," he said.


"It's actually cheaper for me to drive to Auckland, catch the flight from Auckland, pay for parking for the three or four days I'm there, and at the end of my time come back and then do the reverse.


"It usually saves me $100 to $200 doing it that way."


Flying from Rotorua could otherwise cost $400-$500 one way on Air NZ, Walker said.


Even if he were to score a Grab-a-seat deal, the times won't get him to his technical writing job for a full day's work.


He's on a fixed-term contract, so moving south with his family wasn't an option.


"To get me to work on time I leave home usually about 1.30am and usually catch either the 6 or 6.30 flight, go down and work a full day.


"Coming home I try to get an early-afternoon flight so I get home to my whānau at 6.30 or 7pm. It's a pretty hard-going few days."


Walker said this grated when he thought about the profit the national carrier made - expected to be $150 million - $190m this year, down from $222m last year.


Then, he said, there was the money it spent on celebrity safety videos and new uniforms.



In Hawke's Bay, Angela Troup was looking forward to her 18-year-old son Jett coming home from Dunedin for his first university break, but the cost of flights on Air NZ was too much.


"I started checking a couple of months ago for this particular week's break and even then each flight was in the mid-fours [four-digit figures]. I was like, wow, okay, because there's another break coming up in June."


Troup's already booked flights for that, but worries about the next few years of Jett's land surveying degree as he samples life in the south.


He's the first from his family to go to university.


"It is hard. I really wish that he was able to come home. He does as well. We're talking daily. He says there's not too many kids left there. It's all a bit quiet."


Otago Nuggets and Southern Hoiho basketball general manager Angela Ruske said the teams were lucky for this season to make group bookings early last year before prices rose.


However, if teams made playoffs, and flights couldn't be booked early early, the budget took a hit.


"You're booking flights last minute and booking flights last minute with Air New Zealand is extremely expensive, and we would have a travelling team of 15-20 people.


"I know last year when we were looking at potential flights online, and this is without a group booking, the cheapest flight was $550 one way to Auckland."


Next year's men's and women's league schedules weren't out yet, but if prices rose Ruske couldn't rule out flying to or from games on the same day.


"It's not ideal, especially when you're doing a long-haul flight up to Auckland. You've got players that are up to two metres-plus tall crammed into a flight for a good couple of hours.


"It's not ideal travelling the morning of [a match], but you save in accommodation costs and all the food costs and rentals costs for vans."


Blenheim woman Nikki, who didn't want her surname used, often had to miss her daughter's rowing and running events around New Zealand if flights were too dear.


She has a clear message for the national carrier.


"Ultimately, I'd just like to see Air NZ be competitive in their pricing and not price gouge. That's my biggest message - please don't take advantage of us because we live in a regional or rural area."