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This announcement validates the hypothesis made by Flight Centre’s general manager, Heidi Walker, in December.
With airline capacity back to around 90 per cent of pre-Covid levels, Walker said New Zealanders would have more choice and thus competition when it came to flights in 2024.
“Though prices are still not back to ‘golden era’ levels, we are starting to see some sharp deals come to market and as capacity continues to increase and demand normalises further,” Walker said.
Walker said the industry expected to see prices come down even more by the end of 2024.
ASB economists agree that pricing pressures in the airline sector should cool further in the coming months.
Foreign carriers bring the pressure
Air New Zealand isn’t the only airline to dangle pre-pandemic type fares at Kiwis. In November, House of Travel advertised return economy flights between Auckland and Los Angeles for $999 and indirect flights to New York from $1199, with American Airlines.
For context, these prices are pre-pandemic levels, Herald Business journalist Grant Bradley reported, while the Auckland to LA fare is half of what it was a year ago.
International air transport costs increased 87 per cent between the end of 2019 to the end of 2022, according to data from Stats NZ. However, these prices fell 15.8 per cent in October 2023 compared to 2022.
That US carriers such as American Airlines and Delta Air Lines are flying to New Zealand is part of the reason for falling prices by providing competition and pricing pressure.
How do Air NZ’s new fares stack up?
Over the last 12 months, the average cost of a return ticket for Auckland - Los Angeles has been between $1200 and $2000, according to Google Flights. This includes flights with stopovers.
Selecting Air New Zealand’s discounted airfares, a trip taken from February 1 to 10, 2024, would cost $1416 and be direct. This makes it an appealing option but not necessarily a competitive one, with American Airlines and Delta offering the same flight for almost exactly the same price.
Air New Zealand’s sale fares starting from:
- Auckland to Sydney from $197 one way
- Auckland to Melbourne from $209 one way
- Auckland to Brisbane from $223 one way
- Auckland to Gold Coast from $244 one way
- Auckland to Adelaide from $308 seat one way
- Auckland to Sunshine Coast from $334 one way
- Auckland to Cairns from $377 seat one way
- Auckland to Perth from $569 seat one way
- Christchurch to Sydney from $219 one way
- Christchurch to Melbourne from $225 one way
- Christchurch to Gold Cost from $244 one way
- Wellington to Sydney from $219 one way
- Wellington to Melbourne from $225 one way
- Wellington to Brisbane from $268 one way
- Auckland to Shanghai from $556 one way
- Auckland to Taipei from $626 one way
- Auckland to Denpasar (Bali) from $696 one way
- Auckland to Hong Kong from $716 one way
- Auckland to Tokyo from $756 one way
- Auckland to Singapore from $786 one way
- Auckland to Honolulu from $547 one way
- Auckland to Los Angeles from $697 one way
- Auckland to San Francisco from $727 one way
- Auckland to Houston from $797 one way
- Auckland to Chicago from $847 one way
- Auckland to Vancouver from $857 one way
- Auckland to Noumea from $235 one way
- Auckland to Niue from $238 one way
- Auckland to Tonga from $252 one way
