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Domestic airfares have risen sharply just a month after Pacific Blue left the market to Air New Zealand and Jetstar, according to Stuff.co.nz.

Air New Zealand has also increased its trans-Tasman fares and those to the Pacific Islands.

Base airfares on the main trunk routes from Wellington to Auckland and Christchurch have shot up $8 to $59 one way, a near 17% increase.

Air New Zealand chief executive Rob Fyfe predicted in August that competition would intensify as the airline and Jetstar jockeyed for position immediately after Pacific Blue’s departure.

Air New Zealand said yesterday the increases were in response to the cost of fuel climbing above US$100 a barrel early last month.

Pacific Blue stopped domestic flights on October 18, after running up $20 million in losses over three years. It continues to fly across the Tasman.

Forsyth Barr aviation analyst Rob Mercer said the departure of Pacific Blue had created a shortage of seats. But that would resolve itself when Jetstar added two more 180-seat Airbus A320 and Air New Zealand began replacing its smaller Boeing 737s with A320s.

Airlines were raising prices up a “little bit” to improve profits that had been too low, he said. Higher fuel costs also needed to be covered. “There will still be plenty of discounting next year to fill the increased capacity.” More at Stuff.co.nz[-*{}*-]Base airfares on the main trunk routes from Wellington to Auckland and Christchurch have shot up $8 to $59 one way, a near 17% increase.

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