Air New Zealand Under Attack From NZ Airports For High Fares And Cancelations

Everyone in New Zealand agrees that Auckland Airport needs to be upgraded, but that seems to be the only thing the two biggest players – the airport authority and Air New Zealand – can agree on. The airline says the plan is too grandiose and it will have to pay for it, and the airport says it is what’s needed for the future of aviation in the country and it needs to get on with building it.

Where is this all heading?

The days of civilized debate seem to have well passed and the ugly spat is starting to border on the ridiculous, with both sides showering tit-for-tat accusations on each other, leaving the actual customers in sub-standard conditions with poor outcomes.

Photo: inProgressImaging | Shutterstock

Yesterday, the NZ Airports Association (NZAA) threw its spanner into the works with a lengthy tirade against Air New Zealand, accusing it of driving up the cost of domestic travel with monopolistic practices and adding to the cost of living crisis faced by Kiwis.

The NZAA is calling for government intervention to monitor domestic airfares and airline performance and give consumers greater transparency amid record-high domestic airfares. Although fares have been trending downwards, data from Stats NZ shows that domestic airfares rose by 7.4% in February compared to January, with Air New Zealand CEO Greg Foran flagging at the half-year results briefing that cost increases would see fares rise in coming months.

Photo: Airbus

NZAA CEO Billie Moore said that the airline is not only upping its fares but also increasing the price of add-ons such as bag check and other ancillaries, like checking a pet, could also be in line for a “future price hike.”

“This is incredibly difficult for domestic and regional travellers. They’re already frustrated about how much they are having to pay to fly, as well as high cancellation rates for Air New Zealand in some regions.

“Air New Zealand is busy blaming Auckland Airport for cost increases when it’s their own record-high domestic airfares and cost add-ons that are driving up the cost of domestic travel for consumers. Airport charges only make up a fraction of a ticket.”

The NZAA also cited data from Infare that Air New Zealand raised average domestic airfares by NZ$51 ($31) to NZ$200 ($122) per one-way airfare for the year ending September 2023, a 34% rise from the previous year. For its own reasons, it also quoted a regional return fare from Tauranga to Nelson “this weekend can cost as much as NZ$1,160 ($708) if you want to check a bag.”

Air New Zealand has its say

The airline hit back yesterday, and according to the NZ Herald said the Infare data quoted by the NZAA is incomplete and does not include online and Grabaseat bookings.

Photo: Jordan Tan / Shutterstock

Air New Zealand GM Domestic Iain Walker said that according to its own figures, February domestic fares rose by 2% year-on-year, which is below inflation and the increases in operating costs.

“That’s why we are taking steps to ensure our fares cover the cost of travel so we can continue to fly Kiwis across the country. It’s also why we – and our competitor airlines – are so concerned about the Auckland Airport redevelopment, which will see charges increase from NZ$9 ($5.50) per domestic passenger today to NZ$46 ($28) in 2032.”

The NZAA also said that with Air New Zealand controlling 86% of the market, the country has the “least competitive domestic aviation market in the world,” which seems an extraordinary claim to make just on a market share basis.

The association says New Zealand sits just ahead of Bolivia, Turkey, Argentina and Nepal in terms of competitiveness and that the NZ government needs to set up an independent monitoring process “to ensure we have appropriate scrutiny on airline performance and pricing.”

What do you think of these airport-airline arguments? Let us know in the comments.