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

Air fares to both cities have been drastically reduced.

According to a schedule on Stuff today, flights to and from Auckland to the central Bay of Plenty destinations will be priced at $39, each way from Wellington, $49; and similar to and from Christchurch, $59.

Rotorua Mayor Steve Chadwick has welcomed Air NZ's Monday announcement.

Several civic leaders have reacted with caution, subject to details of which flights and on which schedules the cheaper fares will apply.

Steve Chadwick.

'Any initiative that benefits our local travellers and our visitors is certainly welcome,” says Steve Chadwick.

'The lowest fares don't apply for all flights but I'm sure that many Rotorua residents, and visitors to Rotorua, will take advantage of the new prices on these key routes to and from our city.”

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

Earlier this week, Rotorua MP Todd McClay, the Opposition's spokesman for tourism and foreign affair and trade, also welcomed the news.