July 28, 2008

Air New Zealand May Raise Prices to Beat Rising Fuel Costs

In response to the increasing fuel costs, Air New Zealand is likely to raise prices and cut capacity on some routes.

The airline has already increased fuel prices for four times in 2008. It has experienced nearly NZ$2 billion fuel costs for the year ended June 30, 2008.

Rob Fyfe, CEO of Air New Zealand, said: "The national carrier would have to raise fares 20% to cover the full cost of fuel increases, a move that was unlikely to happen as it would dry up demand."