One of only two national airlines to fly to the regions, Jetstar is proposing to pull services - and Air NZ commits to delaying price hikes on affected routes until end of 2020.
It would affect 130 return services across five routes: Auckland to Nelson, Napier, New Plymouth and Palmerston North, and flights between Nelson, Napier and New Plymouth to Wellington. The rest of its New Zealand routes are unaffected.
Gareth Evans, Jetstar’s Chief Executive Officer, said in a statement the regional market faced some headwinds with lower demand and higher fuel costs.
“We have given it a real go. However, despite four years of hard work, including becoming the most on-time of the two major regional airlines and having high customer satisfaction, our regional network continues to be loss-making.
“We understand there will be disappointment in regional centres at today’s announcement."
“We are fully committed to our domestic jet services. It’s business as usual for the rest of our New Zealand operation."
The budget carrier previously cut a Dunedin to Wellington service earlier in the year.
Jetstar brought competition to the regions, with 75 percent of people flying on a regional route paying less than $100, and 25 percent paying less than $50.
Last year, Air New Zealand stopped services into Kapiti and three years ago stopped flying to Taupo, Westport, Whakatane and Kaitaia.
Jetstar will continue to offer up to 270 domestic jet services a week between Auckland, Wellington, Christchurch, Dunedin and Queenstown and up to 100 international flights a week on the Tasman and to Rarotonga. It also announced the number of flights between Wellington and Queenstown will be increased.
About 70 employees are affected by the proposal who will be consulted on the proposal. Alternative employment would be made available across other Jetstar and Qantas group services.
Customers who have flights booked after 30 November will be refunded.
Air NZ has jumped in and is offering discounted fares to affected customers.
Air NZ Chief Revenue Officer Cam Wallace says the carrier will commit to not increase its lowest lead-in fares on the routes affected by Jetstar’s withdrawal until at least the end of 2020, subject to fuel prices remaining stable. It will also "explore opportunities to add further capacity to the routes affected by Jetstar’s planned withdrawal over the coming weeks."
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