Airways New Zealand says price increases are needed even though it admits times are tough for the aviation sector.

The air traffic management service provider has today proposed an average annual price increase of 7.7% for airline customers from July 1.

“This translates to a per seat increase of between 79 cents and $2.80 for commercial flights, depending on the aircraft capacity.”

Airways said it was starting discussions with customers and the wider industry on pricing for the next three-yearly pricing cycle.

Airways said it had more than 4000 air traffic service customers including airlines, airports, the Defence Force, commercial and private aircraft operators, recreational flyers, and drone operators.

For general aviation, Airways proposed a 6.8% price increase for the 2026 financial year and a cumulative 10.5% price over the three years to July 1, 2028.

Airways, which is a state-owned enterprise, said its price proposal reflected its underlying costs.

Airways said it acknowledged challenging times facing the aviation industry, with an inflationary environment, soft growth outlook and supply chain challenges.

“Where possible, Airways has sought to offset the impact of cost inflation through careful management of our operating cost base and prioritisation of our capital programme,” Airways chief executive James Young said.

“However, to sustain the current service provision and investment in the future, price increases are required,” he added.

“Ongoing investment in our people and critical infrastructure, and advancing our future service initiatives is paramount to ensuring we can continue to meet the expectations of our customers, today and tomorrow.”

Consultation submissions are due by April 2, then will be posted online for the industry to review for two weeks.

Airways provides air navigation services in New Zealand airspace and across the Auckland Oceanic Flight Information Region, covering parts of the South Pacific and Southern Ocean.

It is also responsible for maintaining aviation infrastructure for New Zealand’s air traffic management system.

The Herald has approached several Airways customers for comment this afternoon.

Airways’ latest pricing framework document said air traffic services technology will change significantly in the next decade.

It said its navigation and surveillance systems comprised a national network of ground-based equipment.

But that would steadily be replaced with satellite-based technology, providing information directly to aircraft cockpits and to air traffic controllers.

Last week, Airways reported an after-tax profit of $6.7 million for the half-year, $500,000 ahead of budget.

“Air traffic services revenue for the half-year was impacted by fewer flight movements, driven by challenges faced by airlines, including engine and servicing issues,” Airways said on February 28.

“While headwinds are expected to persist, core revenue is anticipated to recover through the second half of the year and Airways remains on track to achieve its budgeted group profit for the full year.”