Air Fares Go Up (and Down)
Domestic airfares have fallen whilst international air fares have increased during the last quarter, according to Statistics New Zealand figures released as part of the its quarterly Consumer Price Index information release.
For the quarter ended September 2007 domestic airfares fell 0.1% whilst international airfares increased 3.0%. For the year ended September domestic airfares fell 2.8% and international airfares gained 2.8%. Historically international airfares increase in the September and December quarters and then fall in the March and June quarters.
The fall in domestic airfares can possibly be attributed to the anticipated entry into the market of Pacific Blue Airlines.Despite the trend in declining domestic airfares it is only a very recent one. In tracking airfares for the past eight years and indexing them to a common point in June 1999 it can be seen that domestic airfares have increased ahead of the rising Consumer Price Index whereas international airfares have fallen, particularly in the wake of reduced Trans Tasman fares in 2003.TAANZ will continue to monitor this index on a quarterly basis - it will be interesting to see if the added competition on some domestic sectors will continue to force prices down or whether fares on non-contested routes rise to compensate.
