Prime Minister Jacinda Ardern says the Government was not involved in Air New Zealand's decision to slash domestic fares, but she supports it.
Newshub understands Air New Zealand is preparing to reveal dramatic price cuts of up to 50 percent off its entry level fares on more than 40 routes in the next 48 hours.
It's believed the airline has been working on a strategy to stimulate activity on its domestic market - especially the regional routes.
Ms Ardern told The AM Show her Government had not been involved in the decision making, but advocated for changes to fares around the country.
"Air New Zealand is independent, it's made its own commercial decisions here, [and] this is its planning and its announcement.
"It's fair to say though, that we have harped on about this issue a lot, but I wouldn't translate that into us therefore having been intricately involved in this."
The Government currently owns 52 percent of the airline, but it is commercially independent.
Air New Zealand has been criticised in the past for scrapping flights to regional destinations, cutting services to Kapiti in March 2018.
Regional Development Minister Shane Jones blasted the airline at the time and accused it of being too focused on Auckland.
Air New Zealand responded by telling Mr Jones to back off.
"Any appearance of a lack of commercial independence is viewed seriously by the Air New Zealand Board and is ultimately potentially damaging to the interests of all shareholders, including the Crown," chairman Tony Carter said at the time.
Ms Ardern said she had made public statements about Air New Zealand in the regions and the Government made its feelings known about the loss of services at the time.
But now the airline is reflecting the needs of the public, she says.
"What I'd like to think is that they're reflecting the sentiment of New Zealanders and they've always been quite good at that, picking up that people are seeking something a little bit different from them and access to our regions as destinations is one of them."