The country's flagship carrier says its fuel bill has "effectively doubled" due to rising fuel prices, and warned of possibly "more impactful decisions as time goes on".
Air New Zealand has signalled changes including price hikes, cancellations and schedule adjustments due to the ongoing conflict in the Middle East and global economic woes due to limited fuel supply through the Strait of Hormuz.
In an email shared with customers this morning, Air New Zealand's chief executive Nikhil Ravishankar said "jet fuel prices have increased significantly" and shared exactly how much it was costing the country's largest carrier.
"Six weeks ago, fuel was around US$85-90 a barrel, and today it’s above US$200. For an airline our size, using around 22,000 barrels a day, that effectively doubles our fuel bill from roughly NZ$4 million a day to NZ$8.5 million a day," he said.
He said the company "can't absorb that level of cost increase without taking action".
"Our priority is to keep New Zealand connected while protecting the reliability of our network. We won't pass through the full cost increase because that would put flying out of reach. Instead, we're making targeted fare increases and adjusting the schedule, including combining lower-demand services where possible."
Yesterday, the airline confirmed a further round of schedule changes for May and June, which would affect around 4% of flights.
"Around 1% of customers will be affected, and most will still travel on the same day. That said, if you are one of those impacted we are acutely aware of the inconvenience this causes, and please be assured our teams will be doing everything possible to minimise your disruption," Ravishankar said.
It did not provide a breakdown of the affected services. Yesterday Nelson Mayor Nick Smith said 140 off-peak flights to and from the city had been "canned" in May and June.
Previously, the airline said it would cancel 1100 of its services in March and April and increase its flight prices, with the changes affecting around 44,000 passengers.
Jetstar also cut some domestic and trans-Tasman services.
Ravishankar said "this is a volatile environment, and like everyone we hope to see greater stability soon".
"We know price increases and schedule changes matter, particularly at a time when many households are already feeling pressured.
"We may have to make some more impactful decisions as time goes on, but what I want to assure you is that any changes will be deliberate, carefully considered steps to manage costs while minimising disruption for our customers."
"As your national airline, we are being disciplined in how we’re approaching it. We are actively managing our costs, our network, and our capacity so we can continue to operate more than 400 flights a day safely and reliably and get you where you need to go."
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