Dave Gee: Life from Right Field

That international holiday just keeps getting further and further out of reach. Air New Zealand has announced plans to raise airfares again, because of the continued rise in the price of jet fuel, now over US$170 a barrel.

Air NZ's domestic and trans-Tasman fares will increase by around 3%, for tickets bought from July the 17th. International fares to the United States, Canada, United Kingdom, and Asia will increase by an average of 5%.

The latest fare hikes - which Air New Zealand says only covers part of their increased costs - come just a month after the last rises, and are the fourth airfare increases since March.

The company says it could no longer continue to absorb the higher cost of fuel. However the airline's rejected the idea of charging passengers for luggage, a proposal being introduced or considered by many international airlines.

The record-high oil prices are also putting the brakes on Air New Zealand's expansion plans. The company had previously planned to launch at least one new route every year, including flying into India, South America, and other destinations in North America.

CEO Rob Fyfe says the new Auckland to Beijing service will begin in August as scheduled, but further routes may have to wait until oil prices come down. Air New Zealand is basing its expansion plans on Boeing's next-generation 787 Dreamliner plane, which is 20% more fuel efficient than current aircraft.

However, the 787 has suffered a number of delays, with Boeing now expecting to deliver the first 787-9 planes (the second, larger Dreamliner variant) to launch customer Air New Zealand in early 2012.