Air New Zealand has slashed fares across the Tasman to as low as $69 in a bid to stimulate travel and battle other rivals which have also dropped prices.

Air New Zealand chief revenue officer Cam Wallace says one-way fares will drop as low as$69 on flights from Auckland to Melbourne as an example.

"Customers are going to get some ridiculously good deals on flights across the Tasman. Like all airlines we have seen some softness in demand on routes like the Tasman where we now have some empty seats due to travellers mainly from Asian destinations not connecting between New Zealand and Australia.

"Kiwis and Aussies are going to be able to head away for holidays or to see family and friends or do business for cheaper than a night's accommodation at most hotels.


Here are some of the fares going on sale today for travel from mid-March 2020:

• Auckland-Melbourne: $69
• Auckland-Brisbane: $79
•Auckland-Sydney: $79
•Christchurch-Melbourne: $69
•Christchurch-Brisbane: $79
• Wellington-Sydney: $79

But as with most promotional fares, there can be a catch if booked as two one-way flights.

While it may be cheap to get to Melbourne in March, getting back is much more expensive with fares back to Auckland starting at $245 and as much as $553 for the flight.

But one traveller who went through the airline's website morning was able to get a flight from Melbourne for $69 by searching for a return flight.

As other markets, especially in Asia, are hit by fears over the coronavirus, airlines are looking to fill planes on routes where there is not the same nervousness over travel.

Air New Zealand, Qantas, Jetstar and Virgin Australia have all reduced capacity over the Tasman as a result of coronavirus travel bans and fears over the outbreak but are dropping prices to ensure planes are as full as possible.

Qantas CEO Alan Joyce revealed flights will be cut back in response to an expected cost blowout due to coronavirus. Video / Sky News

The Tasman market had also been hit by the Australian bush fires.


Qantas is this week promoting some transtasaman fares for as low as $119.

Virgin Australia is offering flights for as low as $107 (between Christchurch and Melbourne) and like Qantas offers full service on the Tasman. Air NZ's flights are seat-only.

Cut price fares mean thin margins for airlines after fees and taxes have been subtracted but seen as necessary to keep people flying.

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The Air New Zealand move came a day after it announced its interim net profit had been net profit slumped by 32 per cent to $101 million and the airline warned coronavirus made its outlook uncertain but could hit earnings by as much as $75m.

It said during an analysts' briefing there was strong discounting on Tasman which has at times previously led to what has been described as a bloodbath.

Air New Zealand has reduced total Asia capacity by 17 per cent for February through to June, cancelling Shanghai and Seoul services and cutting back in Hong Kong.

Tasman capacity is being cut back by 3 per cent from March through May and domestic capacity would reduce by 2 per cent across March and April, mainly on Christchurch and Queenstown services to and from Auckland.

Transtasman competitor airlines at Sydney International Airport. Photo / Grant Bradley
Transtasman competitor airlines at Sydney International Airport. Photo / Grant Bradley

Qantas has cut capacity to Asia by 15 per cent until at least the end of May.

It was also reducing flights to New Zealand by 6 per cent with cancellations on three New Zealand routes and Jetstar will reduce transtasman flying by 5 per cent.

Virgin Australia is cutting Tasman capacity by about 3 per cent.
Air New Zealand has about 43 per cent of market share across the Tasman, Qantas (including Jetstar) has 35 per cent, Virgin Australia has 16 per cent and LATAM and Taiwan's China Airlines have the remainder.