Wellington  - Australia's Qantas Airways will hand over domestic services in New Zealand to its budget subsidiary Jetstar in June, the company announced Tuesday.

Jetstar will operate 84 weekly return services between Auckland, Wellington, Christchurch and the South Island lake and ski resort town Queenstown on Airbus A320 jets

A statement said that passengers already booked on Qantas flights within New Zealand after that date would be switched to Jetstar services.

Jetstar announced a "price beat guarantee," under which it pledges to beat by 10 per cent the fare of any competitor airline on its routes at a similar date or time.

Analysts said this indicated a price war with the state-owned national carrier Air New Zealand and rival budget airline Pacific Blue.

Jetstar began a promotion campaign for a two-hour period on its website by offering 1 New Zealand dollar (52 US cents) flights for travel between July and September.

Chief executive Bruce Buchanan said: "Jetstar's expansion into domestic flying within New Zealand is a further significant growth milestone to become the Asia Pacific region's leading low fares airline."

Jetstar, which began flying five years ago in Australia, operates flights across the Tasman Sea from Christchurch and will start operations in April from Auckland. (dpa)