Air New Zealand is now promising that it will slash its fares and beat Australian low cost carriers at their own game. They will offer a flexible “trans-Tasman” product that caters for low cost and business passengers on the same plane.

According to these reports, Air New Zealand is introducing a four tier fare system that allows passengers to add features to their tickets that they want. Air New Zealand will be pitching one of its cheapest offerings, which includes a seat, free tea, coffee or water and entertainment with or without checked baggage. This package will be the same price as a low cost competitors.

However, these cheaper seats will also be complemented by more upmarket offerings that are aimed at Qantas. This is a fare that provides a standard full service offering with drinks, a meal, as well as a deluxe product that gives lounge access and guarantees travelers will have a free seat next to them. All seats on the airline’s A320s will be up for grabs, and the airline will let the market decide the mix of premium and low cost passengers.

This system, which will be introduced on Pacific Island routes, aims to protect the Kiwi carrier’s 36 percent share of the competitive Tasman market from Aussie low cost carriers and foreign airlines flying from Australia. The company said that it is only selling about one business class seat per flight on its fleet of 320s and will ax this service. They will covert the planes to a standard one class configuration of 171 seats. This moves gives the company an extra 19 seats per plane.