Otago travellers could be the winners in a predicted "bloodbath" between international airlines vying for the lucrative New Zealand-Australia route.
Increased competition in coming months could mean cheaper air fares, and Dunedin and Queenstown have already attracted informal interest from international operators eyeing Southern destinations.
Air New Zealand chief executive Rob Fyfe delivered the national carrier's full-year financial report yesterday, saying he expected about a 10% increase in transtasman capacity during the next six to nine months, "which will very quickly become a bloodbath" for competing airlines.
However, it would be good news for consumer choice.
Dunedin has only Air New Zealand offering international flights, while Queenstown has Qantas and Air New Zealand year-round, but largely during the winter.
Dunedin Airport chief executive John McCall said since Pacific Blue started its domestic service from Dunedin to Christchurch early last month, overall domestic passenger numbers had increased more than 20% compared with July 2007.
Both Pacific Blue and Air New Zealand had made "significant" gains in passenger numbers and Air New Zealand "had not suffered" because of the competition in the domestic market.
"Competition is healthy and brings lower fares, which stimulates consumer interest," he said yesterday.
"More than one international carrier" had identified Dunedin International Airport as a potential destination and there were "signals of interest out there".
While the airport was not in formal talks with other international carriers, Mr McCall was confident "some time in the future there will be other competition for transtasman services" out of Dunedin.
Auckland, Wellington and Christchurch have a variety of international services, including Air New Zealand, Qantas, Sir Richard Branson's Pacific Blue, low-cost operator Jet Star (owned by Qantas), Emirates and Royal Brunei.
However, Emirates recently announced it would be offering a new Dubai-Australia-Auckland service with its big Airbus A380s, while Pacific Blue has extended its services to the Gold Coast by adding new routes to Sydney and Melbourne from Auckland.
About 45% of passengers to Dunedin are tourists, with the balance travelling locals.
Queenstown Airport chief executive Steve Sanderson said he had had informal talks with international carriers about using Queenstown.
The airport had the capacity to host more flights and while there was snow and ice on the runways at times, disruptions to flights this year had amounted to less than 1% of traffic.
New navigational systems being used by airlines were overcoming other weather issues, he said.
There had been an increase in both winter and summer flights this season and Queenstown "was becoming more of a four-season destination".
