Consumer New Zealand says a market study is “desperately needed” in the aviation industry and points to the high cost of air travel, especially in the regions where there is no competition on many routes.
It follows Consumer NZ’s analysis of Air New Zealand airfares which compared flights in 2023 and 2024 with flights in 2019 to 2021.
Ten of the 11 flights in the comparison had price increases between 34 and 297 per cent. The flights were matched as closely as possible for timing, days and bags. Air New Zealand has labelled the comparisons as misleading because 2021 was the middle of a pandemic and average fares across its domestic network have risen by 22 per cent.
However, Consumer NZ’s communications and campaigns advisor, Abby Damen, says the organisation regularly receives complaints from people frustrated about the cost of flying, as well as issues with cancelled flights, particularly in some regions.
In some regions, she says the only options might be to grin and bear it – or not fly at all.
The organisation has called for transparency as Air New Zealand holds 86 per cent of New Zealand’s aviation market, including a monopoly on many routes, that Abby says makes the country’s domestic airline industry the most concentrated in the world.
She points to recent market studies into highly concentrated sectors such as grocery and banking, that have highlighted how limited competition can result in poor outcomes for consumers.
Communications and campaigns manager, Jessica Walker, says the organisation is concerned about the consumer impact of the highly concentrated aviation market, particularly in the regions where for many, flying Air New Zealand could be their only option.
“When prices increase significantly, way faster than a person’s wages, it ultimately means many people no longer have the option to fly at all.
“At Consumer, we firmly believe that a market study into our aviation market is desperately needed.”
If a market study did eventuate, she says it would be undertaken by the Commerce Commission and would look into every aspect of the aviation market.
