Air New Zealand is poised to drop entry-level prices by up to 50 per cent on more than 40 domestic routes this week, 1 NEWS understands.
The airline has been looking for ways to stimulate domestic demand since announcing a profit downgrade last month.
Prices are to fall by up to half on some entry level fares, within 48 hours.
Last month, the company announced they were expecting $340 million to $400 million in earnings, down from its earlier guidance of $425 million to $525 million.
This includes the financial impact of the global Rolls-Royce engine issues which continues to be challenging for the business, both commercially and operationally.