Air New Zealand moves to all inclusive pricing on domestic fares in New Zealand

Air New Zealand has announced it will introduce simpler, all-inclusive pricing on its domestic fares from March 31, 2003.

In response it says to customer demand for easier to understand fares, additional costs such as the Government security and insurance levies currently added into fares will be incorporated into a new overall price so that the price consumers see, is the price they will pay.

Air New Zealand has said that this is not a price increase as overall the airline will not be collecting any more levies, taxes and surcharges under this new pricing structure than it does at present.

The new all-inclusive prices have been calculated by taking the airline's Express Class fare and then taking the overall total of levies applicable to each route.

The average of these levies has then been calculated, and this has been smoothed across each route, evening out the higher and lower ends of the levy spectrum to produce one straightforward, all-inclusive price.

Levies currently vary, even on the same route, depending which journey options a customer takes (direct or indirect) and the aircraft type involved (jet or turbo-prop). The new approach delivers a simple all-inclusive price, regardless of which journey option a customer chooses.

The current levies payable per sector travel are as follows:

* Civil Aviation Authority domestic passenger levy $2.00

* War Risk Insurance Levy $5.00

* Domestic Aviation Security Screening levy $2.80 (applies only to aircraft with 90 seats or more)

Air New Zealand Chief Operating Officer Andrew Miller described the move to inclusive pricing as "an initiative that delivers simpler fares for customers - true to the spirit of Express Class."

He added: "Research feedback shows customers are keen for this change. They want one easy to understand price with no added levies to the fare."

Customers booking online will continue to avoid any service fees and for customers booking through Air New Zealand Travelcentres or the Call Centre, the new all-inclusive advertised price will include the current service fee.

Air New Zealand said that customers booking through a travel agent will still be required to pay a service fee.

FARES NOT COVERED BY THIS NEW STYLE OF PRICING

International Fares

Air New Zealand's international fares will remain as they currently are, ie: the fare component to which is added whatever levies, taxes and charges apply.

Airpoints

The current system where Airpoints members pay for any levies and charges by credit card separately when redeeming their points against flights, will stay the same.

Domestic add-ons to international flights

Where connecting domestic flights are included in an international itinerary, the levies and charges applicable to that domestic flight may be calculated separately.

Freedom services

As Freedom no longer operates on domestic New Zealand routes, it is not part of this move to all-inclusive pricing. Freedom's international fares will continue to be priced exclusive of levies, taxes and charges, as they are at present.