Air New Zealand is cutting domestic air fares for the second time in nine months.
The national carrier says it's introducing more of the bigger A320 aircraft on main trunk routes to replace Boeing 737s, which have fewer seats.
It will also increase the number of flights.
That will mean the introduction of an extra extra 6000 seats a week over the next year.
Air New Zealand's Australasia general manager Bruce Parton says the cost per trip of operating a 737 and an A320 is roughly the same, so it's passing on the savings to customers, which he expects will stimulate travel.
He says the airline has invested close to a billion dollars in the new aircraft and is confident the New Zealand tourism market can be stimulated.
Mr Parton says the airline works closely with both regional and main centre tourism groups and have a number of plans in place to get the market going.
He says Air New Zealand is also extending its airpoints system to allow members to pool points and share them with up to four others.