Why you'll be paying more for flights this Christmas

Anyone planning to travel this summer can expect to have to pay more for airfares.Economist Benje Patterson said fares would be higher over the Christmas period than they had been a year ago.Stats NZ's latest data showed people booking domestic flights in September were paying 5.1 percent more than the same time a year earlier."That increase is relatively modest compared to international airfares, which were up a much sharper 12.3 percent over the same period," Patterson said."The reality is that the fuel crisis has put upward pressure on airfares. We are also seeing some increases in accommodation prices, although nowhere near to the same extent."All this means that holidays are going to be relatively expensive for many New Zealanders this summer. I would anticipate that domestic travellers will continue their recent trend of being relatively conservative with their spending. Higher living costs remain a challenge, and the labour market is still not showing material signs of improvement."Air New Zealand said it had had to increase its fares in response to significantly higher jet fuel costs."Higher average fares have helped offset some of these additional costs, but haven't covered the full impact of fuel price increases."While we can't put a single percentage on how domestic fares this summer will compare with last, prices vary depending on the route, demand, availability and when customers book. We know affordability matters to New Zealanders, and we're continuing to offer a range of fares across our domestic network. The best prices are generally available to those who book early."In an update on Wednesday, Air NZ said it carried 1 percent fewer passengers in the first quarter of the financial year than the same period a year earlier.Domestic passenger numbers were down 2.7 percent. Short-haul passenger numbers were up 3.7 percent and long-haul down 2.3 percent.It noted that Singapore jet fuel had increased in price from an average US$85 a barrel in the first quarter of the last financial year to an average of US$140.Patterson said the "silver lining" for the tourism sector was that international visitor numbers were growing strongly."Indications from both Auckland and Christchurch airports, our two largest international gateways, suggest this growth will continue over the summer season."For tourism operators that appeal to both domestic and international visitors, this growth in overseas arrivals should help offset any softness in the domestic market over the busy summer period."Sign up for Money with Susan Edmunds, a weekly newsletter covering all the things that affect how we make, spend and invest money.