Peter Clark: aviation commentator on domestic flight prices soaring in November

Domestic travel prices are rising as the year draws to a close.

Stats NZ says fares rose nearly 11 percent in November on the month before - the biggest lift since July last year.

Aviation commentator Peter Clark says, to a degree, it's down to supply and demand. 

"Then I think sometimes the airline doesn't have the supply to offer, so they capitalise on filling every seat at the last minute - and know that they can demand a fairly high fare."

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Prices for domestic flights rose more than ten percent in November,
according to stats nz IT. It's the highest increase since
July last year. In mid November, there were reports of
flights nearly tripling in price due to demand from people
flying to euguestic Coldplay. Aviation commentator Peter Clark is with
me this afternoon. Try and break this down. PETA good afternoon, Yeah,

(00:21):
a good afternoon to you. Should we have to accept well,
first of all, do you accept that this November increase
is down to events like Coldplay and other concerts around
the country.

Speaker 2 (00:32):
Well, those peak demands to increase feares momentarily, really over
a few days, So they're just spikes in the fair
ratio that we see on a day to day basis.
But the fears do rise dramatically when the algorithms portray
that there is going to be a demand for certain

(00:53):
routes at certain times.

Speaker 1 (00:55):
Is this surprising? This sounds to me like basic supply
and demand.

Speaker 2 (01:00):
It is supply and demand, But then I think sometimes
the airline doesn't have the supply to offer, so they
capitalize on filling every seat at the last minute and
know that they can demand a fairly high fear. You
can get your graber seats earlier on, but you can't
plan in the future six to eight months out on

(01:21):
a fear that you might need and a demand for
a rugby game or a game or a concert.

Speaker 1 (01:29):
No, But I mean, how do you get around this?
What is the way around this? The airline itself was
said basically, yes, there were spikes in the month because
of things like coldplay, but also there were other major
events on. There were marathons here, there and everywhere, and
those lower, those cheaper fares get booked up quickly and
then everyone else is on the higher ones.

Speaker 2 (01:50):
Well that's the way it is going to be. But
I do think sometimes I feel our high feares are
definitely far too high. I think the airline's got to
realize that it is the only monopoly player on the
domestic markets, especially to the small places Gisbon, Cookoe's, follow
Rays and all and Tyrannus, you know, and we need

(02:10):
those airlines to offer frequency and capacity and not overcharged
because it's the demand is there for those flights.

Speaker 1 (02:19):
They made one hundred and forty six million dollars net
profit after tax to June, which was down drastically on
what they hoped to make. Is that a super profit?
How does that compare to other countries?

Speaker 2 (02:31):
Well, I don't know whether you can compare it because
we are owned. The airline is actually owned basically by
the shareholders, which is the government and private shareholders. So
the attitude of the the airline is we have to
return a profit to the shareholders. But how much should
that share that profit be or should we be looking

(02:54):
at freet replacements, engineering costs and other things that could
be Stop spending all this money on ecoplanes at the moment.
I know that's very important in our future. But at
the moment, we need to run the airline for the
people of this country. And I think that is the
number one thing. And sometimes I think that's been overlooked.

Speaker 1 (03:16):
You think, are we going go go broke? Do you reckon?
I mean, is there too much? Hey look at me,
I can fly my plane on vegetable oil and not
enough I can actually get you there on time.

Speaker 2 (03:27):
Well, I'm starting to feel that with the National Airline
as it is a monopoly airline. It's as I said,
and I feel sometimes that I think that in New
Zealand needs to actually look at what their key thing
is it's to transport people around New Zealand. This is
domestically at a fair price, and I think spiking prices

(03:50):
to capitalize on those demands to me is unfair. Reduce
the profit margin and start looking at our future as
an airline to offer frequency and capacity to the people
of the country.

Speaker 1 (04:03):
If you don't make a profit, how do you invest
in new planes?

Speaker 2 (04:08):
Well, you've got a plan for new planes. They become
a cost in your planning, so that profit would be
distributed through planning over several years. A plane doesn't come
by today, get it tomorrow. You plan it over a
five year period. And I think our domestic market at
the moment some of our planes are up seventeen years

(04:29):
old on our domestic market and we are seeing a
lot more breakdowns and a lot more costs running the
domestic airline. To me, sometimes we need to get past
that also, and we should have had earlier fleet planning.

Speaker 1 (04:44):
Thanks so much for your time, Peter Peter Clark, aviation commentator,
if you're just joining us the flights Domestic flights rose
ten point eight percent in November, according to stats in Zed,
this off the back of a very busy month for
some concerts and some marathons, etc. Which push demand up.
But also let's not forget the supply side. They've got
their Pratt and Whitney engines that have got maintenance issues.

(05:04):
Six of the Airbus NEOs out of action at any
one time. Apparently they've got problems with the Dreamliners. So
it's almost a perfect storm up in the skies at
the moment. Love to know your thoughts. Nine two nine
two is the number to text. I had to book
a flight yesterday to fly yesterday at the very last
minute for a personal thing just same day there and
back Auckland Wellington five hundred bucks and one of those

(05:27):
flights was jet Star. I think the jet Star one
was about one hundred and forty. And yes, that's very
very expensive, but I had to do it. I don't
think that's that's unreasonable for a same day booking.

Speaker 2 (05:40):
Do you for more from Heather Duplessy Allen Drive, Listen
live to news Talks.

Speaker 1 (05:45):
It'd be from four pm weekdays, or follow the podcast
on iHeartRadio.