A small Auckland airline is to compete with national carrier Air New Zealand, as it proposes an Auckland to Whangarei route.

Fly My Sky currently operates a service between Auckland and Great Barrier Island but has spotted a gap in the market for cheaper flights to Northland.

The family owned airline has been in operation for nearly 40 years with a fleet of 10-seater Britain Norman Island aircraft, which service the Auckland to Barrier Island route.

Fly My Sky owner and CEO Keith McKenzie said the company is looking to expand operations to Northland. Whangarei would be the obvious first route for the expansion.

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"We believe there's not the same level of service for the public up there," he said in an interview with Radio New Zealand's Morning Report.

"There aren't the number of flights that are available in other parts of New Zealand, and we believe there's a niche there for someone like ourselves to offer some alternative services."

The 40 minute Air New Zealand flight from Auckland to Whangarei can cost up to $275. Although cheaper fares can be bought in advance, this is roughly equivalent to the cost of a flight to The Cook Islands.

"We're starting at $99 per person each way," said McKenzie.

"I think over all we'll be more than competitive for the current operator."

The new service is aiming to appeal to business travellers.

The two scheduled return flights, Monday to Friday, include a 7am from Auckland – two hours before Air New Zealand's current departure.

The 8.20 flight from Whangarei will also allow business commuters to get to Auckland for the start of their day.

Air New Zealand's CEO Christopher Luxon says his airline welcomes it.

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"It's a really great thing, because there's a really vibrant secondary, smaller airline network in regional New Zealand.

"The fact that we have new and emerging airlines is really fantastic."

The Auckland carrier currently runs flights to Barrier Island, but aims to expand operations to Northland. Photo / Getty Images
The Auckland carrier currently runs flights to Barrier Island, but aims to expand operations to Northland. Photo / Getty Images

While the Air New Zealand defends its regional service as adequate, there is a pledge to grow its domestic service by 20 per cent over the next five years.

The new Whangarei service will be in operation from October 23rd with aims to expand to four return flights a day.