Jetstar will pull out of its Christchurch to Sydney service due to tough market conditions.
The Qantas subsidiary will suspend its five-times-a-week flights from the middle of October.
''We've been monitoring the route for some time due to its challenging commercial performance and have decided the capacity could be put to better use on routes where there is greater demand within the Qantas group network,'' a Jetstar spokesman said.
Passengers who have booked flights between Christchurch and Sydney from October 15 will be rebooked onto Qantas services on the same day or can request a full refund.
Qantas flies the route seven times a week.
Jetstar will continue to offer up to 10 direct flights a week from Christchurch to Australia, with daily services to Melbourne and three services a week to the Gold Coast.
Jetstar chief executive Gareth Evans told the Herald last month the airline had seen a softening in demand in New Zealand during the last six months.
Air New Zealand is also scaling back network growth in response to weaker conditions.
Jetstar started its New Zealand operations with Christchurch-Sydney flights in December 2005 before expanding into the domestic market four years later.
It says it will continue to operate more than 100 transtasman flights per week across nine routes including: Auckland to Sydney, Melbourne and the Gold Coast, Wellington to the Gold Coast and Queenstown to Sydney, Melbourne and the Gold Coast.
The airline is also changing its flight times for better connections out of Auckland.
From October 15 the airline will shift the Auckland-Gold Coast service to the morning, enabling connections to Japan (Narita) via the Gold Coast.
Later this year it launches services to Seoul in South Korea from the Gold Coast around the same time as Air New Zealand does from Auckland.
Evans says he hopes Kiwis might be tempted to do the dog-leg through Coolangatta.
Jetstar is upgrading its fleet with the introduction of the Airbus A321 NEO from July next year. The current overall order is for 99 with an initial call of 18.
While they are mainly for domestic Australia, some will be used on transtasman routes.