The airline has surely been caught on the wrong side of fuel hedging contracts formulated to protect them from fuel price rises. The reason for not reducing fares is that they had purchased their fuel before hand and so the recent fall in prices had not reduced its fuel bill.
Air NZ said its fuel bill this year would be around $1.1 billion, up from around $900m last year and $480m three years ago.
Over the past six months the price of crude oil has fallen from a peak of about $US78 a barrel to under $US52.
Other airways like the British Airways, have reduced their fares.
If it carries on like this passengers are likely to shift to airlines offering cheaper tickets.
Via: Stuff
