Airports say Air New Zealand is increasing fares on non-competitive domestic regional routes to offset pressure from Jetstar.
Regional airfares, where NZ has no competition from JQ, are up 4.2% for this half of the year while available seats fell 4.2%, show figures from New Zealand Airports. On routes with JQ competition, NZ dropped fares by 4% and increased capacity by 0.6%.
NZ Airports gives the example of AKL-CHC where capacity is set to grow significantly, with Jetstar projected to increase its seat count from around 491,000 in 2025 to 611,000k in 2026. Correspondingly, NZ’s fare for this route has dropped by 16.9%.
In regions where JQ does not operate, the airport body says it sees yield management. For example, AKL GIS is seeing a 6.2% increase in fares while capacity is being cut by 1.9%.
The airline blamed rising airport charges, among other cost increases, for rising fares when questioned by MPs last week. Auckland Airport’s half year result showed aeronautical revenue from airfield services charges grew 11% compared to a year earlier.
. . . ‘Deeply frustrating’
New Zealand Airports ceo Billie Moore says this country has the most concentrated domestic aviation market in the world among markets of comparable size, with NZ holding over 80% of domestic capacity and a monopoly on 80% of domestic routes.
“In this context, it is deeply frustrating to see Air New Zealand continue to point to airport charges as a reason for rising fares,’’ she says.
Airports must invest in the essential infrastructure that the airlines need to run their businesses. Moore says airport charges make up 7% of airline operating costs on average. A 10% increase in air port charges changes fares by 0.35 0.7%. Fuel, labour and aircraft costs have far greater impact. ‘’Airport charges simply do not drive airfare increases.’’
. . . From NZ
NZ says its data shows that its regional fares have increased on average by 2.9% from H1 FY25 and H1 FY26. “If you look at the Statistics New Zealand data released last month, domestic airfares in New Zealand fell 7.7% for the Dec 25 quarter,” says an NZ spokesman. “We have also continued to invest in our regional and domestic fleet growth. Since 2024 we have received two new A321 aircraft and two new ATR aircraft.”
The national carrier says this fleet growth will continue with two of five new 787s arriving this year. “We have also introduced a jet service on our CHC–HLZ route which allowed two ATR to be redeployed to grow other parts of our regional network,” it adds.
