Air NZ slams price hike

Air New Zealand has slammed a 78% rise in Dunedin International Airport user charges as profiteering at the expense of passengers.

From Friday, fares will rise by up to $4 from the airport, which is now claimed to be the second most expensive airport in the country for Air New Zealand planes.

"We are uncomfortable with such a massive increase, which we do not believe is justified," Australasia operations general manager Glen Sowry said.

The increase worked out at $1.8 million a year.

"We made it clear at the time of the consultation with the airport company that we were very uncomfortable with the charges being proposed."

The airline had increased domestic passenger numbers in and out of Dunedin and it was "disappointing Dunedin airport is now penalising us and the travelling public with increased per-passenger costs".

A softening in demand from price-sensitive customers was likely to result in jet services being replaced with smaller ATR aircraft, Mr Sowry warned.

"We are forced to pass those costs on to the travelling public, and ultimately we know from extensive experience that that will result in a suppression of demand for travel."

Since December, the airline had absorbed the increases at a time when fuel costs had added an extra $5 to the average one-way fare from Dunedin.

The airline also criticised the Dunedin airport company's investment "in significantly more infrastructure than what was required when they built the new terminal ... and we continue to hold that view very firmly".

Mr Sowry warned the rises could hit tourist numbers.

Dunedin Mayor Dave Cull referred comment to the airport company, and chief executive John McCall issued a single-sentence statement: "Following the completion of full consultation with its airline customers, in accordance with the requirements of the Airport Authorities Act, Dunedin International Airport Ltd applied revised landing charges from 1 December, 2011."

Mr Sowry said Wellington Airport had announced a 54% increase in charges to airlines and questioned why airports were increasing charges above inflation.

"Inevitably, these costs will need to be passed on in the form of fare increases to consumers. Unfortunately, our customers in Dunedin are also likely to face further fare increases as a consequence of the actions of other airports around the country."

The airline wanted airport regulation strengthened to prevent such "profiteering" and said the Government should act


The cost of flying

• Air NZ operates 101 Dunedin return trips a week.
• Mainly 133-seat Boeing 737 and 68-seat ATR.
• Charges last raised 2001.
• Airport company now charges $1391 for a Boeing 737, $521 for an ATR, and $1768 for an A320.
• Dunedin-Wellington and Dunedin-Christchurch services fares rise $3 each way. Dunedin-Auckland goes up $4 each way.
• Stand-by fares will also rise $3-$4.
• The rise amounts to an average of 7% a year, Air NZ says. Average fare increase over same period put at 1.4%.


Re: more competition

Indeed, Mike Stk, Air NZ certainly have held a legacy there with stamping on competition. Kiwi International was the first, I flew with them Dunedin-Sydney for about $300 return, six months before they sadly went under. The hostess had been telling me to watch this space because within months they were looking at ‘spreading their wings' with a service to UK. In ensuing years, more was to follow. Technically speaking, it seems Pacific Blue gave up, and Ansett let go well, went under, even though for a while, when they began operating in NZ skies almost 25 years ago, they had a hold on Air NZ, but the tide seemed to turn.

It has no peer. Because back in the early half of the 1960s, there was a small airline called Spanz, (South pacific Airlines of New Zealand) devised by a couple of visionary ex WW2 fighter pilots. They were quickly seen as direct competitors to NAC as they offered a new standard of service, but really it was supposed to compliment the other as a tourist airline. They only lasted 5 years.

I remember on a flight Christchurch to Wellington in 1993, at the height of competition with Ansett, I got a full salad meal on this flight, had to gobble it fast because it was a 737 rather than prop. A few years later, just after Ansett had gone, and all I got was a cup of coffee and red boiled lolly.
A shame we don't seem to have a stronghold of budget or other airlines, like in UK/Europe, or Asia.

I do not use Air NZ internationally anymore, but still will for domestic, at this stage.

More competition

Pukeko: that's what competition will get you - Air NZ's been pretty good at squeezing competition out of the local market - it's that sort of thing that we need, or if we can't get it we need some attention by the monopolies commission

I've reached the point where I don't watch the safety videos, there's only so much insipid rugby advertising one can take.

Brinkmanship

I travel overseas a lot (too much) as part of my business. That means travelling through Auckland a lot, I use the morning direct 737 flights. If they cancel those and force us to chug up to Christchurch and wait for another plane that's another 2-3 hours lost from my day.

I'll certainly be booking my flights on someone who will get me there and keep me working for those hours (ie Jetstar) - and once you open that can of worms I'm obviously going to be looking at other ways to leave the country - Christchurch->Singapore (not on Air NZ) becomes an interesting hopping off point, or Jetstar to Taipei or Guangzhou may be cheaper and no slower than Air NZ through CHC/AKL/HNG which would be my alternative.

I don't care about $4 extra on a flight, those 3 hours of work time are far more valuable to me than that, even if I have to do them in an airport lounge - this sort of brinkmanship does you a disservice, threatening to remove service just annoys your customers, they will find better ways to go about their lives that may not include you.

Want more customers? Figure out a way to get someone from Dunedin to Sydney in time for a morning meeting, or even for lunch. It should be possible, in practice it means I have to spend a night somewhere along the way, Sydney should take twice as long as Auckland, 3 hours, not 7 hours. [abridged]

Both as bad as each other

Fairly easily figured, another way of grubbing more money for the stadium. That airport has council ownership, and was plastered with stadium promo over its terminal windows before the thing was built. I felt at the time that they might do this. Recently dropping off a friend there, it was $4 for 30 min. Extortion. Another avenue of stadium revenue, and supposedly not cribbing the ratepayer. But when he or she wants to fly...

But why Air NZ care, because they too are profiteering, and are as they say “Crazy about rugby” spending lots in sponsorship for that, so both are as bad as each other. My last flight with them, you’d think it was Rugby Airways, with everything, even the safety demo, had to bring rugby into it, just because it was the RWC period, last Sept. Their fares are not always cheap. Wanted to fly to Christchurch to connect with my international flight, the only fare, one way, was $212! Anyway, it’s all fine, in just over a week I will be flying, from Christchurch, having bussed there, then away with Air Asia, and the ticket to KL, 11 hour, 9000km flight, cost just over double the $212 for the 320km 45 min flight to CHC.

Bills to pay

Doesn't Air NZ know we have bills to pay, like the stadium, among others? They can choose to absorb the costs. If less people travel, as they claim, because of the increased cost of fares, they then have to offer inducement discounts to get them back on their airline. Win,win for us, I think.

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