Airlines in New Zealand say ticket prices will rise again because jet fuel has become more expensive during the war in the Middle East.
Air New Zealand announced this week that domestic flights will increase by $10, short international flights by $20, and long-haul flights by $90. Other airlines, including Qantas and Jetstar, are also raising their fares.
Experts say fuel prices can change quickly, which makes it difficult to know whether the increases are fair. Economist Benje Patterson explained that oil prices and the cost of refining fuel have both jumped recently. Because flights are often sold many months before travel, airlines must guess what fuel will cost in the future.
Patterson said it may be reasonable for airlines to cover the extra fuel costs for now. However, he warned that keeping higher prices for a long time might be harder to explain. He suggested a temporary fuel charge might have been clearer, because it could be removed once fuel prices fall.
Air New Zealand has also been facing financial challenges. Problems with aircraft engines and weaker demand for some flights have made it harder for the airline to earn money. Because of this, the company has been looking for ways to reduce costs and improve its finances.
Another economist, Brad Olsen, said airfares have already risen sharply since the pandemic. International flight prices increased by about 77% in five years, while domestic fares rose 49%. Even so, he said a $90 increase may not change household budgets greatly because international flights already cost hundreds of dollars.
