US airfares drop again as competition heats up

Airlines have been vying for dominance in the transpacific market.

A travel agent is offering return seats from Auckland to Los Angeles for $699 and add-on fares to New York, Chicago or Miami for just another $10.

Helloworld is selling 200 seats aboard American Airlines' new service at the cut rate price - $100 lower than those announced on Wednesday.

The agency is selling the seats as a loss leader and helloworld general manager of marketing David Libeau said he expected them to sell out quickly.

"These prices are not sustainable long term but this is fun while it lasts," he said

Those opting for the $10 add-on flights further east must pay for accommodation or a cruise to the value of $500 or more.

Travel is between October 15 and December 15.

"The market is very competitive right now which has been driven by increased competition on the North American routes, particularly with American Airlines (to LA) and United Airlines (to San Francisco) about to commence nonstop services from Auckland," said Libeau.

American Airlines on Wednesday released Auckland-Los Angeles $799 return fares for later this year.

The airline, which has teamed up with partner Qantas to take on Air New Zealand on the route, will start flights in June using a Boeing 787-8 Dreamliner.

The fares are for travel between October 15 and December 15 and go on sale to midnight tonight. Passengers from Wellington and Christchurch can travel via Auckland for another $100 each on the airline's deal. The Wellington travel period is from October 17 to December 15 and the Christchurch window between October 15 and November 30.

It is the latest shot in an intensifying fare war across the Pacific where Air New Zealand hasn't had a direct flight competitor since 2012.

When American Airlines last November announced it was flying the route, Air New Zealand reacted by cutting some Grabaseat airfares to Los Angeles from about $785 to $499.

Fares on the route have ranged around $1500 to $1600 in the past depending on the time of travel.

American Airlines is the world's biggest airline that emerged from bankruptcy protection in 2013; but since its merger with US Airlines, restructuring and tail winds from lower fuel costs it has made record profits and is growing aggressively.

Airlines have struggled to make the transpacific market pay in the past, including Qantas which pulled out of the Auckland-Los Angeles route four years ago.

- NZME