Up to 20,000 people have been affected after Jetstar announced a proposal to withdraw from regional flying in New Zealand at the end of November.
"The opportunity has not worked out the way we'd hoped," Jetstar chief executive Gareth Evans said in a press conference today. "We're disappointed."
The cancellation is expected to impact 15,000-20,000 people who have flights booked beyond November. The affected travellers will be offered full refunds or a chance to book flights on alternative services, Jetstar announced in a press conference. The proposal will not impact their domestic and international flights.
The routes affected are from Auckland to Nelson, Napier, New Plymouth and Palmerston North, and Wellington to Nelson.
The airline began flying to regional centres in December 2015, and currently offers up to 130 return flights per week during the peak season.
Mr Evans said today's proposal to axe regional flying was due to the operation continuing to make a loss, combined with rising fuel costs and a softening of demand in the regional travel market.
"I think a softer domestic market operating on thin routes, rising fuel costs, outlook as we sit here today is unlikely to improve," Mr Evans said. "We wanted to bring better fares to this market - we're not cutting and running. We've given it four years and that's a long time in anybody's language.
We're disappointed- Jetstar's Gareth Evans
"We're hoping consumers will see it for what it is. We're still committed to our jet operations.
"We're disappointed we've had to make this decision. We have given it a red hot go and we've stimulated demands in these markets and we've brought low fares to these markets. We can't continue this, unfortunately, given the level of losses that we're incurring."
Air New Zealand has since offered discounted airfares to Jetstar customers affected by today's announcement.
Affected customers will be able to purchase an Air New Zealand seat-only fare for the same route on the same day, schedule permitting, for up to $50 each way.
In a press conference, Commerce and Consumer Affairs Minister Kris Faafoi said, "There's always an opportunity in these things for locally-based carriers to get in there as well … There's always an opportunity in a crisis."
Jetstar is expected to consult with just over 70 affected employees before announcing a final decision before the end of October.
It hopes to offer them alternative roles in New Zealand or Australia.