Air New Zealand plans to cut domestic fares to boost passenger numbers.
From Monday, the airline will reduce fares by an average of 10%, while some regional routes could be up to 23% cheaper.
Air New Zealand chief executive Rob Fyfe says cheaper fares will stimulate travel and the company plans to simplify its fare structures with the current three fare types reduced to two - Smart Saver fares and Flexi Plus fares.
The airline gives the example of the lead-in price for a Flexi Plus fare from Auckland to Wellington, which it says will drop to $199 from $319.
Meanwhile, the airline has announced that passenger numbers fell 1.2% in September compared with the same month last year.
The number of passengers taking long-haul flights dropped 10.7%, while domestic passenger numbers climbed 1.5%.
Trans-Tasman and Pacific flights took 2.2% fewer passengers.
Air New Zealand had also cut capacity across the Tasman and through routes in Asia, the United Kingdom, the United States and North America. Group-wide yields fell 10%.