Friday, 6 June 2008

Air NZ: Fares up, Flights down

Air New Zealand says high jet fuel prices have forced the company to announce its second airfare price hikes in three weeks, and cuts to some weekly and seasonal services.

Air NZ is increasing its Domestic, Trans-tasman, and International fares by an average of 4%, and will cut back the number of flights on some routes to Australia, Japan, and Hong Kong.

The latest fare hikes come into effect from the middle of this month, and follow an average 3% rise for domestic fares announced in mid-May.
The continuing high cost of jet fuel has put pressure on airlines all over the world. Air NZ believes its in a better position than most, but has been forced to make two profit downgrades in the last two months. The company is now forecasting a pre-tax operating profit of $200-220 million for the year to June.

Air NZ was bailed out from bankruptcy in 2001 by the Labour-led government, to the tune of $1 billion, and is still under 77% state ownership.

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