Air fares to rise as fuel prices jump
By ROELAND VAN DEN BERGH - The Dominion Post | Wednesday, 16 April 2008

Air fares are set to rise next month after jet fuel prices reached record highs in the past week.

Air New Zealand said domestic and international fares were under review and a decision would be made at the end of the month, if fuel prices remained at present levels.

Jet fuel cost more than US$136 a barrel in Singapore yesterday, peaking at nearly US$141 on Friday.

The airline raised most domestic and trans-Tasman fares by 3 per cent last month after fuel prices reached US$130 a barrel, up nearly 70 per cent in the past year.

Passengers had been shielded from soaring prices by the airline's fuel-hedging programme, which locked in the price of fuel for a period of time, but these hedges were coming to an end.

Australia's Virgin Blue said it would add up to A$12 to one-way Australian domestic fares from May if the fuel cost did not fall this month.

Chief executive Brett Godfrey said the unrelenting rise in fuel costs was a key concern and now accounted for about a third of the airline's total expenses.

A spokesman for Virgin Blue's New Zealand offshoot, Pacific Blue, said no plans existed to increase fares here yet.

Qantas also has its fares under review. Several airlines around the world have already increased fares.

Meanwhile, Pacific Blue will add 10 trans-Tasman flights from June 16, including two additional services from Wellington to Brisbane, taking it to five flights a week.

More flights will be added from Auckland to Brisbane and the Gold Coast, plus two more flights from Christchurch to Sydney and Brisbane.

Pacific Blue announced this month that it would add Dunedin to its domestic network in June when it took delivery of a seventh Boeing 737-800.

Air New Zealand is adding flights from Wellington to Brisbane and Melbourne in October.

From here .