Air New Zealand's CEO is tipping lower fares on flights between New Zealand and Australia as more seats come onto the market. Right now, demand is high but capacity is tight, and that's putting upward pressure on prices. But CEO Greg Foran says passengers can expect fares to start trending downwards as soon as next month, when the supply of seats will increase.

Freedom to fly - but at a cost

Fully vaccinated travelers can once again move freely between New Zealand and Australia in either direction, but flights aren't yet back to pre-pandemic capacity. If you need to travel at the last minute - be prepared to dig deep and accept a limited choice of flights. This Friday, if you need to travel between Auckland (AKL) and Sydney (SYD) there are two flights available, both on Air New Zealand, and fares start at US$641 - that's for a 1,350 mile (2,160 kilometer) flight that takes three hours and 30 minutes to complete.

The Auckland - Melbourne (MEL) sector has one available option this Friday, again Air New Zealand, and the lead in fare is US$642. The Auckland - Brisbane (BNE) has a choice of three flights, including one Qantas and two Air New Zealand services. The lead-in Air New Zealand fare is US$430. The lead-in fare on the Qantas Boeing 737-800 service is an eye-watering US$983.

“Air New Zealand is literally the only operator moving across the Tasman," Mr Foran told The Weekend Australian newspaper. "As competition increases, that will force pricing down."

Fares fall as more flights and seats get added to sectors

Skip forward a month to late May, and in unsurprising aviation news, prices come significantly down. While it's nearly always cheaper to book an airline ticket in advance rather than close to the travel date, the less expensive late May prices are also a function of more flights and added capacity on routes between New Zealand and Australia.

On Friday, May 27, the number of airlines flying between Auckland and Sydney has increased to three and the number of flights to five. While this isn't a patch on pre-pandemic flight numbers, it is a move in the right direction. On May 27, Air New Zealand, Qantas, and LATAM are all flying between AKL and SYD. Air New Zealand has two flights, both Boeing 787-9 operated and starting fares of US313.

Qantas also has two AKL- SYD flights that day, one operated by an Airbus A330-300 and the other by a less salubrious 737-800. The entry fare is US$244. But LATAM's Boeing 787-9 service offers the best fare - US$158 one way. LATAM resumed its flights to New Zealand and Australia in late March. Jetstar is also back on the Auckland - Sydney route in late May, although doesn't have seats available on May 27.

Qantas also turns up on the AKL - MEL sector by late May, offering a single service compared to Air New Zealand's double daily flights on May 27. Fares start at US$251. Jetstar is also back on the route and flying around three times a week by the end of May. Qantas and Air New Zealand both offer a single widebody service each between AKL and BNE on May 27.

Right now, Air New Zealand continues to do the bulk of the heavy lifting on routes between New Zealand and Australia, supplemented by far fewer Qantas, Jetstar, and LATAM services. But as the latter airlines increase their services, upsize their planes, and put more seats into the market, prices will inevitably fall - and that's good news for travelers.