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Asia Pacific Airfares Continue Upward Trend In '05

10 June 2005

Asia Pacific Airfares Continue Upward Trend In Q2’05

10 June 2005 - New Zealand is currently enjoying some of the most stable airfares in the region according to the second quarter American Express Airfares Index for Asia Pacific.

The index shows First Class, Business Class and Discount Economy airfares have remained unchanged in local currency during the quarter along with Lowest Peak-Season Excursion and Lowest Off-Season Excursion fares. Only Full Economy fares rose during the period, recording a 1.1% increase. A year-on-year comparison shows First Class fares have increased 1.8%, Business Class fares are up 1.2%, Full Economy fares have climbed 2.7%. Discount Economy fares fell 2.6% year-on-year.

Airfares have increased considerably in several classes of travel during the quarter on routes from Australia, Hong Kong, Indonesia, Japan, Malaysia, Pakistan, Taiwan and Thailand. Only a few reductions in airfares were recorded on First Class airfares on routes from Indonesia, Economy airfares from Singapore and Excursion airfares from India.

According to Robert Tedesco, Head of Consulting Services Japan Asia Pacific Australia at American Express, the results primarily reflect the ongoing impact of jet fuel prices and changes in airline pricing strategy.

“Oil prices have been oscillating around US$50 per barrel over the past six months, with some peaks well above the US$50 per barrel seen during October 2004, and during March and April 2005. On top of this, we have seen significant increases in the jet fuel refining margin placing further cost pressure on airlines and driving up the incidence of increased fuel surcharges. As the index focuses on base fares, these temporary surcharges are generally over and above the increases in airfares surveyed,” said Mr Tedesco.

“Long haul routes from New Zealand have seen some changes in airline service offerings which have contributed to an increase of up to 20% year-over-year on Full Economy airfares on some routes out of New Zealand although this is offset by increased service quality.

The overall index for the Asia Pacific region quarter-over-quarter (Q2 versus Q1), saw a general increase in First Class fares of 1.9% and Business Class fares of 1.8%. Full Economy airfares increased 1.2% while Discount Economy Fares rose 1.1%. Lowest Peak-Season Excursion fares climbed slightly by 0.7% as did Lowest Off-Season Excursion fares, up by 0.9%.

The overall index for the Asia Pacific region indicates that, between the second quarter 2004 and second quarter 2005 surveys (year-over-year), First Class airfares across the region increased (on average) by 3.6%, while Business Class airfares increased by 4.4%. Full economy airfares increased by 3.0% and Discount Economy airfares increased by 4.2%%. The highly restricted, Lowest Peak-Season Excursion airfares remain unchanged while the Lowest Off-Season Excursion airfares were up 2.0%.

Airfare type Qtr-over-Qtr Q2’05/Q1’05 Overall Percentage Change in Local Currencies Year-over-Year Q2’05/Q2’04 Overall Percentage Change in Local Currencies

First Class 1.9% 3.6%

Business Class 1.8% 4.4%

Full Economy 1.2% 3.0%

Discount Economy 1.1% 4.2%

Lowest Peak-Season Excursion 0.7% 0.0%

Lowest Off-Season Excursion 0.9% 2.0%

Over the past three years, the overall indices for the Asia-Pacific region have increased steadily. First Class and Business Class fares have risen 10.2% and 11.8 respectively with Full Economy and Discount Economy climbing 7.1% and 6.8% respectively.

Significant market changes during the quarter First Class and Business Class airfares from Australia increased 1.1% and 1.0% respectively during the quarter. First Class and Business Class from Hong Kong increased 2.3% and 1.8% respectively. Peak-Season and Off-Season Excursion airfares from India fell by 5% and 1.8%. First, Business, Full and Discount Economy airfares from Japan all increased by 2% to 2.4%. All fares in New Zealand remained stable apart from Full Economy fares which increased 1.1% in the quarter.

INDIVIDUAL MARKET RESULTS (in local currencies)

Australia - Airfares were relatively stable in Q2’05 compared to Q1’05 First Class airfares from Australia increased 1.1% in Q2’05 while Business Class airfares from Australia increased by 1.0%. Full Economy airfares from Australia increased 0.2% and Discount Economy airfares from Australia were unchanged. Peak Season and Off Season Excursion airfares both increased 0.3%.

Year-on-year increases for First Class, Business Class, Full Economy and Discount Economy Class fares were 4.6%, 4.8%, 3.5%, and 11.4% respectively.

Hong Kong - Airfares increased only slightly in Q2’05 from Q1’05. First Class airfares increased 2.3%. Business Class airfares increased 1.8% with Full Economy and Discount Economy climbing 0.4% in the quarter. Peak Season and Off Season Excursion airfares both increased 0.2%.

Year-on-year increases for First Class, Business Class, Full Economy and Discount Economy Class fares were 2.8%, 3.0%, 0.3%, and 0.3% respectively.

India - First Class airfares from India fell 0.3% in Q2'05. Business Class airfares from India fell by 0.5%. Full Economy airfares from India increased 0.6% as did Discount Economy airfares. Year-on-year increases are as follows: First Class 2.1%; Business Class 1.9%; Full Economy 4.4%; and Discount Economy 4.4%. Peak Season and Off Season Excursion airfares both decreased 5.0% and 1.8% respectively.

Year-on-year increases for First Class, Business Class, Full Economy and Discount Economy Class fares were 2.1%, 1.9%, and 4.4% respectively.

Indonesia - First Class airfares from Indonesia fell by 1.4% in Q2’05. Business Class airfares rose by 5.7% while Full Economy airfares increased by 5.4%. Discount Economy airfares increased by 5.2% during the quarter. Peak Season and Off Season Excursion airfares both increased by 0.8%.

Year-on-year increases/decreases are as follows: First Class -1.1%; Business Class 6%; Full Economy 5.7% and Discount Economy 5.5%.

Japan - First Class airfares from Japan increased 2.4% in Q2'05. Business Class airfares from Japan increased by 2%. Full and Discount Economy airfares from Japan both climbed 2.0%. Peak Season and Off Season Excursion airfares both increased by 3.1% and 3.7% respectively.

Year-on-year increases are as follows: First Class 7.5%; Business Class 7.1%; Full Economy 5.3%; and Discount Economy 5.3%.

Malaysia - The First Class and Business Class fares from Malaysia both rose 2.9% in Q2’05 from Q1’05. Full and Discount Economy airfare indices from Malaysia all increased 2.6%. Peak Season and Off Season Excursion airfares both increased by 1.4%.

Year-on-year increases are as follows: First Class 8.6%; Business Class 8.6%; Full Economy 8.2%; and Discount Economy 8.2%.

New Zealand - First, Business Class, Discount Economy, Peak Season and Off Season Excursion airfares from New Zealand remained stable in Q2'05. Full Economy airfares from New Zealand increased 1.1%.

Year-on-year, First Class airfares increased 1.8%; Business Class airfares increased 1.2%; Full Economy increased 2.7%; and Discount Economy fell 2.6%.

Pakistan - The First Class airfares indices from Pakistan rose 5.0% in Q2’05 while Business, Full Economy and Discount Economy increased by 5.1%. Peak Season and Off Season Excursion airfares increased by 0.8% and 0.9% respectively.

ENDS

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