Why are airport taxes and service charges so high on Trans Tasman flights between New Zealand and Australia?
Air New Zealand has a sale on flights to Australia today. There is nothing amazing about that – these days it’s something that happens almost as a regularly as a sale at Briscoes.
I happened to notice a few comments on social media this morning from people complaining about the cost of return flights from Australia. Air NZ advertise flights to Australia for $149, but make no mention of the price of the return flight – and that’s not surprising, because it’s a lot more than $149.
Here’s an example of a return flight to Sydney from Wellington with flights for $149 to Sydney, and $209 back.
The first obvious conclusion for those that don’t understand the aviation industry is that Air New Zealand are blatantly ripping off customers – but the reality is far from that.
When you look at the breakdown of that $149 flight, $62.40 of it is actually tax and service charges. This is a combination of New Zealand departure tax, and the Australian arrivals charge.
For the return $209 flight, $122.56 is tax and service charges. This is a combination of Australian departure tax, and the New Zealand arrivals charge.
So from a $358 airfare, $184.96 is simply tax and service charges that’s collected by Air New Zealand and paid to both Australian and New Zealand Governments. That’s over 50% of the total cost on a entry level special fare. When you see airlines offering airfares under $100, that’s not enough revenue for the airline to actually pay for the fuel that you’ll burn.
As a comparison it’s only $156.96 in tax and service charges if you head off on a cheap Air New Zealand special to Los Angeles to visit Disneyland and stop by for a world famous 4x4 burger and animal fries at In-n-Out burger.
There has been plenty of talk from both Governments in recent years about improving the Trans Tasman experience for passengers, and talk of pre-clearing Customs and Immigration before hoping on the plane. While it would be nice to see this, one can only live in hope that one day we might see these charges actually drop rather than continue to rise.
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