The tourism industry and travellers have been dealt a blow by United Airlines' decision to can direct flights from Auckland to Houston on a Boeing 787 Dreamliner.
It is estimated the loss of the service will cost tourist businesses up to $150 million a year.
The airline has told staff in a memo that it is dropping the route after the Texas city local authority backed plans to develop an airport used by a rival carrier, jeopardising feeder traffic for the 787.
United has merged with Continental Airlines, which in 2010 announced it would start flying here with the high-tech plane from last November.
That was delayed by Boeing's manufacturing hold-ups although the airline said last year that it still hoped to have the service running this year.
But this week it was announced Continental planned to cut 1300 jobs and some services at Houston's main airport after the city backed Southwest Airlines's bid to start international flights from a secondary facility. The 10 per cent cut in seating capacity at George Bush Intercontinental Airport included dropping the planned route to Auckland, United told employees in a memo.
"We announced the Houston-Auckland flight on the assumption Houston George Bush Intercontinental Airport would be the sole international airport in Houston, maximising connecting traffic," a United spokesman told Weekend Business.
The flight into the large hub airport in the heart of the US would have been a important boost to bound and inbound tourism. Auckland Airport said about 140,000 extra seats on the canned service and more than 50,000 arrivals would have been worth up to $150 million a year.
Auckland Airport's chief executive, Simon Moutter, said it was very disappointing that this important new service had been caught up in a local Houston dispute over airports.
"It is equally frustrating that the delays in the delivery of the B787 aircraft have meant that the service was not already well under way by now.
"We firmly believe that New Zealand needs more air capacity to North America and more carrier choice, and that Auckland remains an attractive proposition for airlines."
The airport would continue to talk to United about options to fly into Auckland and would work harder to attract other carriers. "We are confident of converting one of these opportunities in coming months."
The commercial director at House of Travel, Brent Thomas, said the United announcement was a blow.
American tourists from not only Texas but also the eastern seaboard would have used the service as a quick way of getting to New Zealand.
And Houston would have ideal for Kiwis linking to Washington, New York or to the Caribbean.
Travel to the United States was booming, up 26 per cent in the year to April due to a favourable exchange rate and good deals on offer in the flat economy, Thomas said.
There was added pressure on capacity now Qantas had stopped direct flights from Auckland to Los Angeles, leaving Air New Zealand as the only airline to fly direct to the US.
Air NZ said it was increasing capacity to San Francisco and Los Angeles next Northern Hemisphere winter. The airline is due to take delivery of the first of its 10 Dreamliners around the middle of 2014.
Goldman Sachs analyst Marcus Curley said the impact on the airport company would not be financially serious but would be disappointing.
"I don't think you'd describe it as financially material," he said.
For Air New Zealand, Curley said, it was a case of "less bad news" because if Continental had arrived it would have been a negative.
Problem at Houston
* Continental's plans for a Boeing 787 service to NZ have been sunk by a Houston council decision.
* Continental would have been the first airline to use the Dreamliner here.