Air New Zealand is to cut long-term lead-in fares to Australia by an average of 15 per cent.
Auckland, Hamilton, Wellington, Christchurch, Queenstown and Dunedin customers could benefit from cuts in fares to Sydney, Melbourne, Brisbane and the Gold Coast.
Fare reductions were effective from 14 October, theairline said.
Air NZ general manager Tasman Pacific Airline Glen Sowry said prices were dropping to stimulate demand on the highly competitive Tasman market, which has an over supply of capacity.
Air NZ was investing almost $60 million in fitting its fleet of 13 A320 and five Boeing 767 aircraft on Tasman and Pacific Island routes with new personal on-demand in-flight entertainment, which customers were able to watch gate-to-gate, he said.
The 767 and A320 fleets were also being reconfigured to create a new zone in the economy cabin to provide greater legroom for regular Tasman and Pacific Island travellers.
The first of the refitted 767s and A320s were now in service, with the fleet upgrade to be completed by the end of the year.
"Given this significant investment in our Tasman fleet it is imperative that we fly full planes," Mr Sowry said.
