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There are warnings of less air travel and steeper prices ahead as the price of jet fuel hits lofty heights.
Air New Zealand has revealed it is now paying $130 a barrel for jet fuel, up from $30 five years ago.
Company CEO Rob Fyfe says while price hedging means the cost has not been fully borne by the company, it presents enormous challenges.
He says if the prices are maintained it will have a material impact on the price of travel and likely demand for travel.
And Air New Zealand is sitting on a $1 billion war chest should tough times strike the aviation industry.
The airline has fronted up to MPs at Select Committee hearing on Wednesday, outlining its financial position and future strategies and challenges.
Air NZ Chairman John Palmer says they are running a conservative balance sheet and are holding well in excess of $1 billion in cash.
He says it's a deliberate and prudent strategy given the uncertain environment they are entering.
Palmer says it will allow them to cope with any market downturns or intensifying of competition.
