An aviation commentator says increasing airfares is a "dumb move" and may mean less customers will be willing to purchase flights around the country.
Air New Zealand recently said it was reviewing its pricing tickets, and explained their cost base has risen more than 30%.
"To date, we've absorbed as much of that as we can. However, to reflect the higher cost of providing air services, we need to continue to review our pricing," said an airline spokesperson.
However, joining Breakfast this morning, aviation commentator Irene King said increased fares may have a negative impact on the airline's performance.
"In a crazy sort of way it makes sense ... but equally, if you think about government agencies, they are having to trim their costs really quickly, and Air New Zealand doesn't seem to be deploying that strategy.
"I accept a lot of the costs are fixed, but let's get real here — they can't keep on relentlessly upping airfares."
King said if customers kept paying the prices put into the market, airlines would continue to raise them but there was a limit.
"Globally, airfares have been relentlessly tracking down and that's called efficiency pressures. What we are not seeing here in New Zealand is a lot of efficiency from the airline itself."
King said customers in New Zealand have had more choice in airlines than they have ever had, and could now make decisions on when they bought, what they bought and how they traveled.
"The cost pressures on airlines are relentless, but they are not responding smartly.
"Increasing airfares is a dumb move, because ultimately we — the consumer — are going to rebel and say 'no, we've had enough, and we're not going to pay those prices anymore.'"
King added she has not seen any cost pressure response from Air New Zealand, but has noticed "interesting projects" which could increase their cost base "enormously".
"SAF fuel for example, fuel prices could go up three to four times what they're currently at, but Air New Zealand is not responding smartly yet. They will, and that's because we the consumer are still paying their prices.
"[As soon as] revenues start to nosedive, which they will, then you'll see a really mean, lean Air New Zealand responding to what the consumers want, which is lower competitive airfares."
As well as raising long-term domestic fares across all routes from today, Air New Zealand has also announced changes to short haul international flights – with inflight entertainment and a snack or meal available to all customers from later this year.
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