Air New Zealand is promising more discounted fares as it adds hundreds of thousands of extra seats to its network where travel agents say price competition is already fierce.
The airline says it will add 12 per cent capacity across its domestic and international operations during the next six months and will drop prices to help fill them.
At its half-year profit briefing, chief executive Christopher Luxon said the benefit of lower fuel prices would give the airline more leeway to drop prices but the biggest influence on fares would be extra capacity.
"That is going to flood the market with seats and some good deals as we try to fill those aircraft up."
While the overhaul of Air New Zealand's regional operations meant it was pulling out of three provincial centres, new larger planes meant capacity was increasing sharply across that network. The airline has previously said the introduction of more efficient aircraft and a schedule revamp could lead to fare reductions of 15 per cent across the network.