Jetstar's planned Auckland-Singapore service is set to slash fares on the route and could mark the start of increased no-frills long-haul flying out of New Zealand.
Although Jetstar is yet to release fares, it says A$99 ($122) promotional fares on its Melbourne-Singapore flights also announced yesterday were a price guide to its New Zealand services due to start on March 17 next year.
Singapore Airlines is the only other carrier on the route and its fares start at $950 close to that date.
Jetstar's executive manager of operations, Mark Dal Pra, said the airline was well positioned for further growth in New Zealand. It is considering possible services to North America although yesterday said it had no immediate plans "at this time".
Another budget airline, AirAsia X from Malaysia, has discussed flying out of Auckland to Asian cities although it is striking problems on routes where it competes with state-owned Malaysian Airlines. AirAsia does fly to Australia and this week announced return flights to London starting at A$217.
Mr Dal Pra said Singapore was an ideal hub to fly to other Asian countries or on to Europe and for budget-conscious travellers there were many low-cost carrier options.
Jetstar will use an Airbus A330-200 for the 10-hour flight, capable of carrying 303 passengers, including 38 in its StarClass business class cabin.
"People have been starved of low fares on that route for a long time so we expect, given the number of people looking for them, we'll do well."
As with its New Zealand domestic and transtasman services economy passengers will have to pay extra for food and entertainment and depending on the type of fare, there will be charges for bags.
Singapore Airlines has had the route to itself since Air New Zealand pulled out four years ago and says it will review fares. However, its focus would be on continuing to provide full service.
Its New Zealand general manager, Tein-Po Looi, said it was "not shy of competition. We are competing on value."
Depending on the season it flies up to almost three times the number of Jetstar's planned daily services, which are subject to regulatory approval.
House of Travel's retail director Brent Thomas said he expected Jetstar's service to be popular although Singapore Airlines would not necessarily be the loser.
"It's going to be great for the consumer. We're expecting some really good overall long-term pricing and it will stimulate demand."
Jetstar began long-haul international flying from Australia four years ago and its network now includes direct flights to Japan, Taiwan, Thailand, Singapore and Indonesia.
Mr Thomas said the expansion of long-haul services from New Zealand would depend on customer response.
"We've seen this model from Australia where they create one route and look for other opportunities as well. It will depend on how the New Zealand consumer takes to this. Our take on this is that it will grow."
Auckland International Airport chief executive Simon Moutter said Jetstar's announcement was an important milestone.
"The low-cost carrier model is now being successfully applied to longer haul destinations, an important development which we believe offers the New Zealand tourism industry a fantastic opportunity to target the rapidly expanding low-cost carrier network and markets in Asia."
Jetstar's announcement is part of growth returning to long-haul services out of New Zealand, important in boosting competition and keeping fares down.
Continental Airlines last month said it would fly daily from Auckland to Houston using its new Boeing 787 Dreamliner from November next year. Air New Zealand will also boost its international capacity to North America and Japan next summer.
An Air New Zealand spokeswoman said last night the company supported the move by Continental, which is one of its partners in the Star Alliance.
Air New Zealand does not fly into Malaysia like AirAsia X, instead serving two destinations in China and two in Japan, as well as flying via Hong Kong to London.
The company could not comment on speculation about which Asian cities were in the Malaysian sights.
Auckland to Singapore:
Jetstar: About $120 (promotional fares).
Singapore Airlines: $950 for standard fare about the same time.
Jetstar's in-flight charges:
* Blanket and pillow: $7
* Light meal and main meal: $35
* Video-on-demand: $12