Air New Zealand says it will have to increase airfares on international flights as it's unable to absorb the cost of soaring fuel prices and inflation.
In a statement, the airline said ticket prices for customers going overseas would have to increase by approximately 5%.
“Due to the rising cost of fuel and the added impacts of inflation generally across all parts of business, we had to review our pricing,” a spokesperson said.
“Unfortunately, Air New Zealand cannot absorb these increases and so airfares on international routes will increase accordingly by circa 5%.”
The more expensive fares will come as global jet fuel prices surged to decade highs in the last week, according to Reuters.
On Monday, the BBC reported prices had briefly hit their highest levels since 2008.
Higher fuel prices have come as Russia’s invasion of Ukraine has sent uncertainty and volatility through oil markets globally.
The war in Ukraine is having a big global effect. (Source: 1News)
On Thursday, Finance Minister Grant Robertson told RNZ that people should expect prices at the pump to continue rising while the conflict in Ukraine continued.
"We do need to understand that the longer the conflict goes on in Ukraine, the biggest impact economically for New Zealand will be around the cost of fuel."
Read more: Increase in petrol thefts reported as prices surge
Last Wednesday, Energy Minister Megan Woods said the Government would contribute to global efforts to help calm oil markets.
She said oil and gas prices had reached an eight-year high of US$105 per barrel (NZ$150) and that the price increases were “adding inflationary pressures to a global economy”.
Premium 95's passed the $3 mark at some stations with the average above $2.80. (Source: 1News)
“Russia has used its position as the third-largest crude oil producer in the world and the second-largest oil exporter to weaponise energy, withholding oil and gas supplies to Europe in the months before the invasion, contributing to pushing up oil and gas prices,” she said.
“This crisis highlights the need to transition away from a reliance on fossil fuels, not only to meet our climate change requirements, but also to ensure future world energy security.”
Woods said the Government had agreed to release some of its emergency oil stocks as part of a collective release globally.
In January inflation hit 5.9%, the largest increase in three decades.
SHARE ME