AIR RAROTONGA APPLYING FOR 5% FARE AND FREIGHT RATE INCREASE

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RAROTONGA, Cook Islands (December 11, 2000 – Cook Islands News)---Air Rarotonga has made a application to the Ministry of Transport for a 5% increase in inter-island airfare and freight rates to take effect Monday, December 18.

The airline, in a media release, said the increase is necessary because of further rises in the cost of fuel -- which has climbed 70% during the past 12 months -- and foreign currency costs for aircraft insurance, overhauls and parts, which are incurred in United States dollars.

Although there was some improvement in both oil prices and the value of the New Zealand dollar last week, the airline said it will be several months before lower priced jet fuel stocks reach Rarotonga.

The last fuel price adjustment took effect in October, with an increase of 13% in that month alone. Air Rarotonga’s Managing Director, Ewan Smith, said, "Obviously we hate having to raise prices, particularly just before Christmas."

He said, "We are simply unable to insulate our customers from the effects of rocketing oil prices and the recent dismal performance of the New Zealand dollar."

Smith said the airline is monitoring the situation carefully, and is hopeful that a drop in fuel costs and further improvement in the dollar will occur early in the new year, bringing benefits that can be passed on to travelers and cargo customers.

For additional reports from the Cook Islands News Online, go to PACIFIC ISLANDS REPORT News/Information Links: Newspapers/Cook Islands News Online.

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