The price of flying: 'Everywhere you look, costs are increasing'

RNZ News

6 days ago

Costs are increasing for airlines from a variety of sources, with the burden largely passed on to their passengers.
Photo:
Mongkol Chuewong
Regional aviation will become increasingly unsustainable
and ticket prices will continue to rise until the government takes action on aviation system costs, say airlines.
Sounds Air
announced this week
that it will be cutting its Blenheim to Christchurch and Christchurch to Wanaka routes due to spiralling costs.
Sounds Air chief executive Andrew Crawfords has cited rising levies as a contributing factor to the cuts, even though there is still demand on those routes.
"Where are we supposed to get that from? We've just got to pull that on the travelling public."
More services will be lost if there is not a reset of the investment structure of our air industry, says the Board of Airline Representatives.
Executive director Cath O'Brien told RNZ the news that Sounds was cutting operations was not surprising.
"We have seen substantial increases in aviation costs in New Zealand over the last year or so and really there is nowhere else to go for airlines."
O'Brien said the country needed to take a responsible look at all of the costs that were currently being levied on the aviation system.
"Civil Aviation levies are up, Airways costs have risen by 21 percent potentially, Auckland Airport prices for regional airlines increased by 60 percent between 2023 and 2024
"So everywhere you look, costs are increasing for airlines."
She said those costs were "absolutely" being passed on to customers.
"So we need to have a look at airport charges, we need to have a look at the Civil Aviation levies, and say how much should these charges be allowed to increase altogether over time.
"Because at the moment, all of these individual charges increase one by one all of the time, so every single one airport will increase its charges, the CAA will, Airways will, Customs will. So the effect of all that is that airlines will constantly increase prices over time."
She said regional aviation was becoming commercially unsustainable and it was a real challenge for New Zealand as a whole.
"The thing is with New Zealand is our aviation system is user pays, so all parts of the system are funded by airlines and their customers, so CAA levies, Customs, biosecurity, air traffic control, airport charges, all of that is funded by airlines. And in other countries that's not the case, but in this country that's where we are."
In a statement, the Civil Aviation Authority said it was "acutely aware" of the financial pressures smaller operators are facing.
It said the new safety levies came into effect on 1 July and were the first adjustment since 2017.
"The domestic safety levy has gone from $1.60 per passenger, to $3.92 per passenger, excluding GST.
"The CAA works to ensure the travelling public are safe when they fly, and like all government agencies, is also working to ensure that it delivers value for money to the travelling public and the sector to maximum extent practically possible."
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