MIQ is no more, but airlines still need to 'play the game' for international airfares to drop

With New Zealand's border restrictions easing up over the next week, travel company Fight Centre says it's expecting a massive jump in bookings - but the cost of airfares will depend on how much competition there is flying to your destination.

Travellers shouldn't expect to see all ticket prices to drop to pre-pandemic sale levels right away. But over time, more airlines will return to Aotearoa and prices will drop.

Flight Centre's Jonathon Norton says prices will depend on whether airlines want to "play the game" or try to regain some of the losses of the past two years.

"I think we'll definitely see some very competitive prices to some places that want to get demand back up, to get that confidence of the traveller back on board," Norton told Newshub.

"Then you're going to have some of the more established brands like Air NZ and Emirates that will potentially know they've already got the market tied up and probably have to reduce some of those losses that they have over these last few years.

"I think we've already just seen Air New Zealand increase their prices by about five percent." 

Even though demand for international flights out of New Zealand is on the increase as the COVID-19 pandemic progresses to a new phase, airlines can't simply restart all routes immediately.

Norton said a drop in airfares to destinations such as Los Angeles will only come when more airlines enter the New Zealand market. Airfares to the US city are currently around $1800 return on Air NZ.

"When we have the likes of Hawaiian Airlines come back into the market, and Fiji Airways too, it has had some fantastic prices out to LA. Of course, you're going to have to stop over in Fiji, and that could be a hindrance for some customers not wanting to transit," Norton said.

"The prices will probably be high for a while. But with the change at the border, we'll see many more carriers coming back into the country - then we're going to have much more competition, which should reduce those prices."

Norton said the change from having to go through MIQ to home isolation in February saw demand double for destinations like the UK, Europe and the US.

"We absolutely predict this year we're going to see a huge surge as well with Kiwis with confidence, being able to travel to Australia and Fiji will probably pick up as well."

Some airlines pulled out of New Zealand when the pandemic began while others such as Emirates, Qatar Airways and Singapore Airlines continued to operate.  

Singapore Airlines confirmed to Newshub it is ready to increase its current 10 times per week service to Auckland as soon as the demand is there.

As for what this change means to the travel industry, Norton says it's impossible to overstate.

"We have been waiting for this time for a long, long time. We are absolutely ready for it. Our advice is absolutely - if you want to travel overseas, friends and friends, family or holiday, now is the time to speak to your travel agent."