Air NZ cuts domestic airfares

Photo / Brett Phibbs

Air New Zealand is simplifying its domestic fare structure, saying fares to regions will fall by as much as 23 per cent.

Effective from Monday, fares are being reduced by 10 per cent on average to help stimulate domestic travel. Lead-in Smart Saver fares across all regional routes will fall by up to 23 per cent, the airline said.

The current three fare types is being reduced to two - Smart Saver and Flexi Plus. Effectively the old fully flexible and semi-flexible fare classes are being put together.

Lead-in Smart Saver fares on domestic jet routes, between main centres, remain unchanged. They were reduced more than 20 per cent just a few months ago.

The lowest everyday Smart Saver fares will be only available online.

Flexi Plus fares will start at substantially lower levels than existing fully flexible fares, with reductions averaging 32 per cent.

The lead-in price for a Flexi Plus fare between Auckland to Wellington will be $199, which is 38 per cent lower than the old price of $319.

This fare type will allow two free 25kg checked bags and the ability to change flights at the airport on the day of travel for free to any available seat.

Chief executive Rob Fyfe said the airline was looking to create loyalty.

"Our customers expect innovation. If you deliver it people will reward you," he said.

The airline has had load factors around 80 per cent on domestic routes but it has reduced capacity and "parked" aircraft.

Today's move is looking to stimulate demand and in doing so the airline expected to carry more tourists into regional New Zealand, with flow on benefits to accommodation and attractions as the market recovers from recessionary impacts.

Air New Zealand services 27 airports in New Zealand and carries 7.8 million passengers annually.

- NZPA