Airline's $1465 European fare defies market

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The cheapest-ever return fare to Europe may now be on the market, as international airlines compete for the growing number of New Zealanders travelling abroad.

Malaysia Airlines is offering $1465 (including tax) return flights to London, Frankfurt, Amsterdam, Paris, Rome or Istanbul - a deal which analysts say defies the difficult market created by high fuel prices.

The offer is available until May 16, and relates to travel between September and March, excluding peak periods.

An Air New Zealand return fare to London in that period costs at least $2900.

House of Travel spokesman Brent Thomas said his agency had seen unprecedented interest in the deal, with hundreds booking since it came on the market on Friday.

"Even our staff have been taking up the offer. It may be the lowest we've seen ... at least for a five-star airline." Mr Thomas said that despite an economic downturn and fluctuations in fares due to higher fuel prices, New Zealanders were still travelling abroad in greater numbers.

That growth had led to more airlines investing in the NZ market, leading to more competitive prices.

"We've got Jetstar flying much more to Asia, and AirAsia flying from Christchurch. For a small country, we are seeing a lot of opportunities and fantastic pricing."

He said international airlines also saw potential in travel to New Zealand, especially from India and China. Carriers such as Malaysia Airlines were not looking to shift the market, but grow it further.

Flight Centre spokesman James Brooker said the Malaysia Airlines fare could only be matched by one-day deals and expo offers.

"Consultants' phones have been ringing hot. Kiwis should probably take advantage because it's [a] price we haven't seen in a very, very long time."

He said that comparable five-star airlines - Emirates or Singapore Airlines - charged at least $2200 to $2300 for the same trip.

"You compare it to the cheap domestic fare which is only around for a limited time and gets snapped up quickly. This is around for 10 days."

He predicted that the move would not be a great earner for the airline, but could be an attempt to grab attention in an increasingly competitive New Zealand market.

"If you speak to any other airline, [Malaysia Airlines] won't be making any money out of this - they'll just be looking to fill some seats over the Rugby World Cup, and maybe position themselves."

WHAT YOU PAY

* $1465 - Malaysia Airlines
* $2900 - Air New Zealand
* $2550 - Singapore Airlines
* $3000 - Emirates