Air New Zealand has canned the launch of winter flights to Cairns and the Sunshine Coast, along with dozens of other services because of the transtasman bubble pause.
All passenger flights from Australia to New Zealand have been cancelled up until 11.59pm on Tuesday, as the Covid-19 Delta variant outbreak worsens in Australia.
The airline said a reduced number of passenger flights will continue to operate to Australia, ensuring customers currently visiting New Zealand from Australia can return home.
The airline is seeing a large volume of customers cancelling travel to Australia in the next few days, and due to this reduced demand will be rerouting customers booked to travel from Queenstown, Christchurch or Wellington via Auckland for services across the Tasman.
The cancellation of inbound services to New Zealand from Australia will result in the postponement of Air New Zealand's inaugural Auckland-Cairns and Auckland-Sunshine Coast services, which were due to relaunch tomorrow and on Tuesday respectively.
The paused bubble is a blow to Air New Zealand and Qantas which were seeing strengthening demand for transtasman winter holiday attractions - sunshine in Queensland and snow in New Zealand's South Island.
Air New Zealand is contacting affected customers with the option to rebook, put their flight into credit, or receive a refund if they purchased a refundable ticket.
Its customer teams are fielding a large number of calls and it is urging customers to hold off calling unless their travel is urgent.
Customers can also go online to change their flight to a new date or hold the fare in credit to use at a later date.
Chief customer and sales officer Leanne Geraghty says the airline understands how challenging these disruptions are for customers.
"This is a fluid and uncertain time as governments on both sides of the Tasman work to keep their communities safe,'' she said.
''We feel for all of our customers, many of whom have already been waiting a long time to reunite with family and friends. We appreciate our customers' understanding and patience as our teams work to ensure they are kept up to date.''
Cargo services will continue to operate across the Tasman to keep goods moving between New Zealand and the Australian ports the airline operates to.
Hospitality New Zealand said the sector began receiving cancellations within hours of the travel bubble being paused.
Chief executive Julie White said the Government's announcement had had an immediate effect.
"Towns such as Queenstown and Wanaka had excellent bookings thanks to the Australian school holidays starting this weekend, but are reporting cancellations already and for some, these cancellations extend through to August.
"This is not what the industry needs right now.
"Things were looking up, and with a big dump of snow expected this weekend, businesses were geared up for a busy few weeks. This is a kick in the guts for operators."
She said the extension of alert level 2 restrictions in Wellington for 48 hours would have its own costs for hospitality and accommodation providers.
"We appreciate we need to manage the health risk, however this comes at a cost and our sector is at the brunt on this cost.
"Events like this are killing hospitality and tourist businesses. For some it's ruin by a thousand cuts.
"This is a further reminder to the Government, as if one should be needed, of the importance of getting everyone vaccinated as soon as possible."