Jetstar is pulling out of regional services in New Zealand at the end of November, citing continued losses from its four-year attempt break into the Air New Zealand-dominated market.
The Australian low-cost carrier, which will continue to compete on domestic and international jet routes, began flying to New Zealand regional centers in December 2015.
It currently offers up to 130 return turboprop services a week during the peak season across five routes.
About 70 employees are affected by the decision and customers booked on services beyond November will be offered a full refund.
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Air New Zealand quickly stepped into the breach by offering discounted airfares to Jetstar customers affected by the announcement.
It said affected Jetstar customers would be able to purchase an Air New Zealand seat-only fare for the same route on the same day (schedule permitting) for no more than $NZ50 each way.
“We know how important air services are for regional New Zealand and that’s why we’re stepping in to support Jetstar customers with a special discounted fare,” Air New Zealand chief revenue officer Cam Wallace said.
Air New Zealand also committed 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.
Jetstar chief executive Gareth Evans said the decision to pull out of regional new Zealand routes was taken because the operations continued to lose money and because of higher costs and a softening of the New Zealand regional travel market.
“The New Zealand regional market is facing some headwinds, with softer demand and higher fuel costs and we don’t see the outlook changing any time soon,’’ he said.
“ As a result, we’re announcing a proposal today to end our regional services, with the final flights on 30 November this year.
“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 centers at today’s announcement.
“Jetstar brought low fares and competition to the regions and we’ve carried more than 1.3 million passengers since these services began in 2015.”
Jetstar will continue to offer up to 270 domestic jet services a week on its jet services between Auckland, Wellington, Christchurch, Dunedin and Queenstown and up to 100 international flights a week on the Tasman and to Rarotonga.
“We are fully committed to our domestic jet services,’’ Evans said. “It’s business as usual for the rest of our New Zealand operation.
“From the end of October, we’re doubling our Queenstown to Wellington services to six per week and we’ll continue to look at opportunities for our domestic trunk routes and international flying.”
Air New Zealand’s Wallace said the airline would explore opportunities over the coming weeks to add further capacity to the routes affected by Jetstar’s planned withdrawal.
“Air New Zealand currently has 51 aircraft operating 320 flights per day to regional centers,’’ he said. “We will evaluate the demand outlook on the affected Jetstar routes and determine whether we have the flexibility within our current fleet to add more capacity.”
