Air New Zealand's fare reduction announcement should benefit Rotorua.

The airline plans to drop fares by half in up to 40 on its domestic routes.

The news has been welcomed by Rotorua MP Todd McClay, the Opposition's spokesman for tourism and foreign affair and trade.

Monday's announcement did not name routes earmarked for reductions, on which days or at which times.

In 2016, the airline cut its early morning return flights from Rotorua to Wellington. Later, the service was reinstated.

Todd notes Air NZ had not detailed which regions would benefit by the fare reduction.

'While they haven't said which routes will see reduced airfares, it's important that Rotorua is included on their list.”

He says lower fares will attract more visitors.

'It is good for the local economy. It will also be fairer for local people, as flights in and out of the city can be expensive.”

Rotorua Airport.

Air NZ says prices will fall by up to 50 per cent on some entry fares. It has indicated to New Plymouth mayor Neil Holdom discounts would be 'significant”.

In January, it announced it was expecting $340million to $400m in earnings, down from its earlier expectation of $425m to $525m.

The gloomier revised earnings included the financial impact of the global Rolls Royce engine issues which continues to challenge the commercial and operational business industry.

Neither Rotorua mayor Steve Chadwick nor deputy mayor Dave Donaldson were available for comment.