A Consumer NZ report has revealed since the borders reopening after the Covid-19-enforced closures in 2020, the cost of a return trip between Wellington and Dunedin for two people and one checked bag has increased from an average of $487 to $970 — nearly double the price.
During this time, inflation has hovered about 6%.
And even short-haul flights were affected: a Christchurch-Dunedin return trip booked with five weeks lead-in time cost $123.60 in 2020, but the same flight last year cost $344 — nearly three times as much.
"I think there is a case to look at this more closely.
"The reality is that for many smaller communities there is only one airline choice: Air New Zealand. We do see though on the main trunk line of where Jetstar operates there is a bit more competition — although that hasn’t helped Dunedin much.
"I think this is something that should be considered for a market study and perhaps some rule changes around baggage handling to make it fairer and easier for other players to enter the market."
Air New Zealand general manager domestic Scott Carr said Consumer NZ’s article was disappointing.
"The small sample of fares they have used reflects two very different operating environments.
"In 2020 and 2021, there was a global pandemic, the borders were closed, and at times there was restricted domestic travel.
"Our domestic fares have increased by 20% from 2020 to 2024. Meanwhile, the airline has faced rising costs from suppliers of over 40%. In the past year, according to Statistics NZ, domestic airfares have decreased by 4%."
Dunedin Mayor Jules Radich said Air New Zealand needed to pay attention beyond the economic climate.
"Dunedin’s connectedness to the rest of New Zealand is vitally important both economically and socially for our local community.
"As an airline partly owned by the government, it should also be a consideration for them."
Rural Communities Minister Mark Patterson, based in Taieri, said the analysis from Consumer NZ "backed up the anecdotal evidence I get all the time".
"Affordable and reliable air connectivity is critical for our regions to thrive.
"There is some work going on at government level on how we might stimulate more competition from smaller regional airlines."
Consumer NZ spokesman Jon Duffy said Air NZ’s response seemed to miss the bigger point— that it was "impossible for consumers to understand whether they are getting a fair deal from the national carrier".
"We know that the lack of transparency in pricing along with the dire state of competition in our domestic aviation market are negatively impacting consumers, particularly in the regions. New Zealand has the most concentrated domestic aviation market in the world, with Air New Zealand holding an 86% market share."
He backed Ms Leary’s suggestion of a wider market study.
"A Commerce Commission market study into the broader aviation sector could provide answers on where competition could be improved so that this critical part of New Zealand’s transport infrastructure produces fairer outcomes for consumers.
"We stand by the results of this aviation price check, which reflects the real experiences of Air New Zealand passengers.
"It serves as evidence to support the anecdotal concerns being communicated to us by consumers across Aotearoa.
"We accept that more research and bigger sample sizes would be useful, but that doesn’t make the sample misleading, it just means there are unanswered questions."
