23 Jan 2015

Air NZ 'likely to lower long-haul airfares'

7:36 pm on 23 January 2015

An analyst says it is likely Air New Zealand will lower its long-haul airfares after a range of airlines have cut fares or indicate they will do so.

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Photo: RNZ / Diego Opatowski

Virgin Australia lowered its fares from Brisbane and Sydney to Los Angeles, and Qantas had launched an already planned sale that undercuts Virgin's new fares.

So far Air New Zealand had made no comment about the changes.

An analyst at Forsyth Barr, Andy Bowley said Air New Zealand would probably be forced to cut its international fares if oil prices remained low.

"Whether they lead or lag others the long haul airfares will decline, it's the competitive nature of the markets they operate in."

The largest US carrier, Southwest Airlines, estimated it would save $US1.7 billion more this year compared to last thanks to the plunge in the oil prices.

Sunair Aviation cuts airfares

A regional airline has said it will slash airfares on more than half of its routes by about 10 percent next month because of the plunge in the price of oil.

Tauranga-based Sunair Aviation CEO Dan Power said the company's fuel costs have fallen by 20 percent over the past three months and it wanted to pass on savings to customers.

Mr Bowley said Air New Zealand was unlikely to make similar savings immediately because it bought much of its fuel in advance.

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