High airfares weigh on Kiwis, Air New Zealand

Flying Kiwis are enduring a tough run, with Air New Zealand cutting its profit guidance and no respite to sky-high domestic airfares for frequent flyers.

On Monday, New Zealand's national carrier said softer than expected "economic and operational conditions" were behind a reduced profitability of between $NZ40-50 million ($A37-46 million) this year.

Increased competition on North American routes, local inflation, weakness from both business and government demand and jet fuel above $US100 a barrel were all listed as weaknesses weighing on the airline.

The extra pressures are forcing Air New Zealand to raise prices on domestic routes, which have already ballooned following the COVID-19 pandemic.

Executive Jeremy O'Brien confirmed reports price rises would take place on Monday night.

"Like many Kiwis and businesses, Air New Zealand has faced increasing costs over the past couple of years ... our cost base has risen by more than 30 per cent, and, to date, we've absorbed as much of this as we can," he said.

"To reflect the higher cost of providing air services, we need to continue to review our pricing."

The price hike - which has not been disclosed - will occur at midnight on Monday April 22.

Data from Stats NZ shows an extraordinary surge in the cost of domestic airfares occurred from 2022.

At the start of 2022, local airfares cost only two per cent more than they did in 2017 - but by the end of 2022, they had jumped an extra 60 per cent.

Domestic fares jumped another 10 per cent through to mid-2023 before easing slightly into 2024, but remain 56 per cent higher than two years ago.

Following the re-opening of borders, international fares have jumped up and down, but have eased 20 per cent in the last year.

It is a common cause of outcry in New Zealand that trips from Auckland or Wellington to Christchurch or regional routes can cost as much as a trans-Tasman fare.

Brent Thomas, chief operating officer for House of Travel, told Newstalk ZB that Air New Zealand's moves came in part due to a lack of genuine competition.

"They're looking to see where they can maximise their revenue streams and profitability," he said.

Air New Zealand has also moved to streamline its booking options for trans-Tasman and Pacific flights.

Passengers on seat-only economy fares will not be able to buy a meal onboard, instead receiving a snack and basic beverages.

The airline has also announced its Hobart-Auckland route will no longer continue as a year-round service, but resume in October for the warmest six months of the year.

Tasmania's sole regular international air service was suspended earlier this year to help Air New Zealand manage maintenance issues with its engines.