Fees airlines pay for air traffic control will drop by nearly 5 per cent during the next three years, thanks to the travel boom.
Following industry consultation, state owned enterprise Airways will drop prices for airlines by 4.7 per cent the next pricing period. The majority of the decrease will be realised in the first year with a 9.8 per cent reduction.
Airways said aviation growth was fuelling changes to air traffic management prices.
"Providing a price decrease reflects the current growth of New Zealand's aviation sector as well as Airways' commitment to enabling further airline investments in modernisation and expansion," said Airways chief executive Ed Sims.
Airlines, which are frequently at odd over prices set by suppliers of services, have welcomed the reductions, a sharp turnaround on the 3.6 per cent rise that had first been proposed when consultation began.
Air New Zealand's group general manager commercial Jeff McDowall strong domestic and international growth was helping Airways.
"It's great to see a supplier able to achieve efficiencies and reduce prices while continuing to invest in its business to deliver even more efficiencies and productivity."
The International Air Transport Association said the consultation process was commendable.
"Airways' efforts to engage the industry in effective consultations is commendable. The reduction shows that they have listened to and accepted the feedback from airlines during the consultation process," said Conrad Clifford, the association's regional vice president for Asia Pacific.
Sims said by reinvesting the revenues available from aviation growth back into the aviation system, Airways had been able to deliver airlines greater service reliability, better on time performance, and a reduced carbon footprint, while also reducing its prices.
"Within 20 years about half of the world's air travel, some three billion journeys, will touch down in the Asia Pacific region and tourist arrivals in New Zealand are projected to hit 4.5 million by 2022, up from 3.1 million in 2015," he said.
However, while airlines are getting big reductions general aviation operators of small aircraft face a 1.6 per cent increase over the next three years.
"Prices for general aviation operators are set at a level which balances affordability while still reflecting the underlying workload of delivering the service," said Sims.