Air New Zealand's short-haul airlines group general manager Bruce Parton said the airline was not ruling out further price rises if fuel prices did not drop.
‘‘We don't have an indication on what we're likely to do - it's quite complex obviously.''
An announcement is due within a fortnight, but as fuel makes up 50% of the cost of a long-haul flight, as opposed to about 24% of a domestic flight, increases are likely.
Yesterday, the airline announced increases of $10 on each short-haul international leg and 3% on domestic flights.
The increases will apply to travel booked after March 26 but special discount fares, such as $1 grab-a-seat deals bought through the Internet, will not be affected.
When domestic fares were last increased due to fuel costs, in May 2006, the price of Singapore jet fuel per barrel was $US87 ($NZ108).
It was now $US130, with a $US10 increase in the past month alone.
Pacific Blue, which competes on the domestic main trunk and across the Tasman, said yesterday it had no intention to boost its fares in response to rising fuel costs.
‘‘We have no plans to raise prices; we're in the game of lowering them,'' commercial general manager Adrian Hamilton-Manns said.
Qantas said it was ‘‘closely monitoring the fuel situation''.
Mr Parton said Air New Zealand had few options for further savings after cutting labour costs, cutting back on services where possible and a fuel economy drive.
‘‘There's no huge chunks standing out but we'll continue to go after anything we can. We just have no choice.''
The airline had shielded customers for as long as possible from soaring fuel prices through its fuel hedging programme, where prices are locked in at a specific price in advance.
It has 82% of its fuel locked in at $US80 a barrel but this hedging starts to run out in the middle of the year.
In the latter part of the year just 20% of fuel is hedged, at $US89 a barrel.
House of Travel figures show a boom in domestic flying. Retail director Brent Thomas said rising fares forced some leisure travellers to reduce other spending on holiday, and some businesses to rethink over the long-term, but he did not expect yesterday's rises to have any major effects.
‘‘I don't see it as having a big impact, but for those [travelling] on a marginal basis there may be some impact,'' he said
Jet fuel prices are about $US20 more than crude oil prices, which were at near record levels of $US111 a barrel in Asian trade late yesterday, boosted by the US dollar's slump to a new low against the euro.
Investors have flooded into commodities including oil, which they see as a safe haven amid rising concerns over the United States economy and global credit squeeze.
