Budget airline Jetstar is expected to end its service through Hawke's Bay Airport next month.
A proposal was announced by the company yesterday, saying it plans to end the regional network on November 30, ending four years head-to-head with Air New Zealand for the Napier-Auckland market since the introduction of the Q300 turboprop service on December 1, 2015.
The service was later expanded, with several pilots and crew based in Napier, and 27 flights a week for the last two years.
Abandoned will be return services across five regional routes – Auckland and Nelson, Napier, New Plymouth and Palmerston North and flights between Nelson and Wellington.
Jetstar will continue to offer up to 270 domestic jet services a week on its jet services between major centres Auckland, Wellington, Christchurch, and Dunedin and tourist destination Queenstown, and up to 100 transtasman and Rarotonga flights each week.
Hawke's Bay Airport chief executive Stuart Ainslie said Jetstar's decision to drop its regional route service is disappointing but it's not a major setback.
"We are disappointed as it's always good to have competition. Jetstar has been a welcome addition to the airport over the last four years. Our thoughts are with the local people, both passengers and Jetstar employees that are impacted."
Ainslie said Jetstar operated only on the Napier to Auckland route and over recent months there had been a gradual reduction in their capacity.
"Most of our recent record growth has come from Air New Zealand.
"Air New Zealand passengers numbers are up 24 per cent over the last three years and the airline contributes 86 per cent of all passengers.
"It's always an identified risk that passenger numbers could fall for a range of reasons such as an airline withdrawal, less capacity or an economic downturn, and we had already forecast for a slow down in growth over the next 12 to 24 months."
Air New Zealand has already committed to not increase its lowest lead-in fares following Jetstar's withdrawal until at least the end of 2020, subject to fuel prices remaining stable.
Ainslie said the announcement would have no impact on the redevelopment of the airport's terminal, which will see Stage 2 open in October.
He said he would work with other regional partners impacted by Jetstar to develop a regional aviation development strategy, which would look at identifying potential new airlines and seat capacity.
"There has been growth in second tier airlines in the regions and they may see this as an opportunity to step up and fill the void.
Hawke's Bay air services campaigner Simon Nixon labelled it a "crisis" for travellers.
"We all know what Air New Zealand will do, because they've done it before. I think we'll see air fares go up 25 per cent by Christmas."
Jetstar chief executive Gareth Evans said the proposal, which had been subject of rumours and speculation for some time, was based on the operation continuing to be loss-making combined with higher costs and a "softening of the regional travel market".
He said Jetstar doesn't see the outlook changing any time soon and added: "As a result, we're announcing a proposal today to end our regional services, with the final flights on 30 November. We have given it a real go."
The competition with Air New Zealand brought lower fares between Auckland and Napier, with Air New Zealand fares today still available for as little as $49 from October 7, after the school holidays.
Evans said: "Last year 25 percent of our regional customers paid less than $50 for their flight and 75 per cent paid under $100."
The airline was starting a consultation process with about 70 affected employees and expected to announce a final decision before the end of October.
Apart from Air New Zealand and Jetstar, the only other commercial flyer in and out of Hawke's Bay is Sounds Air, with services to the Marlborough-Nelson region.
Hawke's Bay Tourism chief executive Hamish Saxton said a proposed reduction or removal of Jetstar flights was likely to result in a reduction in capacity and frequency for the flights between Hawke's Bay and Auckland.
"The arrival of Jetstar to the region brought with it increased capacity and a greater frequency of flights, so effectively Jetstar adding to the Air NZ services to Hawke's Bay allowed more people to travel more frequently," he said.
Saxton said that with a competitor airline comes the need to compete on schedules and airfares.
"What that will mean in terms of airfares after November remains to be seen."
Business Hawke's Bay chief executive Carolyn Neville said they were "gutted" to hear the news.
"It is a big loss to our community and the impact shouldn't be underestimated.
"There has been a strong base of support from the business community for Jetstar here in the Bay, right from the beginning of the campaign to bring them here," Neville said.
"The multiplier effect from additional cost effective flights has played an important role in supporting economic growth, making it easier to do business with Hawke's Bay and attracting business, investors and people, because it has been easier for them to stay in contact with clients, customers, sales teams and family and friends."
Acting Napier Mayor Faye White said that it's "disappointing" to see Jetstar leave even after all the work that was made to bring them to the region.
Hastings Mayor Sandra Hazlehurst says that it is a "massive blow" for the region.
Lead-in fares for Auckland to Palmerston North and Nelson will continue to start at $49 each way.
Wallace said Air New Zealand would explore opportunities to add further capacity to the routes affected over the coming weeks.