Consumer NZ finds the cost of some Air NZ flights has soared up to 300% in the past 5 years

Abby Damen, communications and campaigns adviser at Consumer says this steep increase in the cost of flying is a hard pill for New Zealanders to swallow when domestic flight options are already so limited in Aotearoa.

“It’s not great news if the only travel option you have is to fly. It’s no surprise that New Zealand consumers are questioning how and why flight prices have increased so much over the past few years.”

The cost of flying is sky high

Damen says the flights in the analysis reflected a range of scenarios and the original booking details were matched as closely as possible (in terms of lead-in times, flight times and days, whether baggage was included, etc).

A return flight to Hamilton for two adults with no luggage, booked just 2 days before a funeral, cost a modest $281.20 in 2021. Three years later, the same flight booking would cost $1,118.00.

A flight for a family of four from Sydney to Palmerston North, made in March 2020, 2 days before New Zealand’s first nationwide Covid-19 lockdown was announced, cost $1,372 in total. Today, the same flight costs $3,451 – two and half times what it cost 4 years ago.

Even in the cases where a booking was made in advance, usually with more than a month’s lead-in time, the airfare had doubled, and in one case nearly tripled, says Damen.

“A Christchurch–Dunedin return trip booked with 5 weeks lead-in time cost $123.60 in 2020. The same flight in 2023 cost $344 – nearly three times as much.

“A return trip between Wellington and Dunedin for two people and one checked bag cost $487.20 in 2020. Fast-forward to the first weekend in May 2024 and the price of the flights had effectively doubled to $970.”

Are these airfares fair?

When asked what was driving the significant increase in flight prices, Air New Zealand pointed to “significant cost inflation”, explaining the airline’s overall cost base had risen by more than 30% since 2020.

Air New Zealand also said it offers well-priced fares across its network, which are most readily available if booked in advance.

Damen says, “People generally know that booking air travel well in advance is the best way to secure the cheapest fare. Yet, of the 11 bookings we recreated, seven were booked months in advance – and those flights still cost 34% to 178% more than they did 3 or 4 four years ago.”

Damen says Consumer regularly receives complaints from people frustrated about the cost of flying, as well as issues with cancelled flights, particularly in some regions.

“If you travel to or from the regions, like Gisborne or Whangārei, your options might be to grin and bear it – or not fly at all.”

A call for transparency

Air New Zealand holds 86% of New Zealand’s aviation market. With a monopoly on many routes, that makes Aotearoa’s domestic airline industry the most concentrated in the world.

“New Zealanders rely heavily on our national carrier and its network, which form core components of the country’s transport infrastructure. Depending on where you live, an Air New Zealand flight may be your only choice,” says Damen.

Recent market studies into highly concentrated sectors, like grocery and banking, have highlighted how limited competition can result in poor outcomes for consumers.

"There are plenty of genuine reasons contributing to the increase in the cost of domestic airfares. But significant price increases in a highly concentrated market is a sign that the industry should be closely monitored.”