Air N.Z. rejects fare comparison

Press, 8 February 1980, Page 7

Air N.Z. rejects fare comparison

A comparison of domestic air fares showing that a 16 per cent increase by Air New Zealand could make this country one of the most expensive to fly in is “utterly meaningless,” according to the airline’s public and corporate relations director (Mr D. C. Saxton).

He was commenting on a survey, made by “The Press” and printed on January 22, of domestic fares in seven countries, on a • cents-per-kilometre basis.

If an application for a 16 per cent rise in Air New Zealand fares were granted, its domestic services would be more expensive than normal econ-omy-class fares in the United States, Japan, South Africa and Australia, “The Press” reported. However, Mr Saxton said this had little validity because it compared Air New Zealand’s future fares with existing ones elsewhere. He conceded that Air New Zealand’s domestic fares had risen rapidly, but said so too had those in the United States. “We have shown on a number of previous- occasions that air fares to and within New Zealand compare very favourably with those applicable in other parts of the world on a cents-per-kilometre basis. “When the latest round of fuel increases is applied in all countries, we could repeat this exercise and be confident that we would come out with the same result.” said Mr Saxton.

In addition, he said, the circumstances governing airline operation in each country were different. As an example, the

United States Government paid $2BOO Million towards maintenance of air fields in 1979, which meant landing fees were lower than in New Zealand.

Mr Saxton said larger volumes of passengers in the United States enabled airlines there to use aircraft and staff more efficiently. In spite of many handicaps in this country, Air New Zealand managed to provide a service “Remarkably cheap by comparison with many countries,” he said.

Considerable care was taken in researching the report to ensure that only overseas domestic routes comparable to those flown by Air New Zealand were used.

For instance, the United States figures would have been lower had • Capitol Airlines’ $l3O unrestricted fare for the 4800 km flight from Los Angeles to New York been quoted. Mr Saxton refers to the benefits and advantages enjoyed by American airlines, but fails to acknowledge that they must also pay all of their staff much higher wages than those applying for the same work in New Zealand. “The Press” maintains that New Zealand’s domestic air fares will, if the 16 per cent increase is approved, be among the highest in the world.

Since our survey was made Australian domestic airlines have been granted a fare increase. On Friday an increase of 8 per cent was approved. This would not alter our conclusions. —Editor.