Air New Zealand has dropped its lowest domestic airfares by an average of 6%.
The national carrier's cheapest fares have fallen by up to $10 by offering flexible "seat to suit" fare options, such as carry-on luggage only, on all regional and domestic jet services.
"Seats to suit is the flexible fare structure Air New Zealand introduced 14 months ago on Tasman and Pacific Island flights and its outstanding success means we are extending it to include our domestic services as well," said Air New Zealand Group General Manager of the Australasia Airline Bruce Parton.
The new entry-level fares mean Air New Zealand will now have over $1.5 million domestic fares under $100 for customers each year, more than any other carrier.
Standby fares were also introduced nationwide until 30 June next year, following trials in Dunedin and Christchurch.
"This means thousands of last minute, bargain basement seats on regional and main trunk routes every week," says Parton.
"It is important to point out that these are standby fares, which means passengers will only fly if there are spare seats available on the specified off-peak flights."
Blackout periods will be put in place on peak travel days when the likelihood of passengers getting a seat is small.
The airline's move comes at a time of increased competition with Jetstar, which will launch flights from the capital to Queenstown on December 22.
Jetstar's fares for the route will start at $79 one way.
Currently Air New Zealand holds a monopoly on the route, with former fares for a direct flight to Queensland costing $266.