Warbirds Over Wanaka has been cancelled for the second time after an outbreak of Omicron in the community plunged the country into the red light setting.
The international airshow, which was first held in 1988, typically attracts about 55,000 people over three days and injects more than $40 million into the Southern Lakes regional economy.
Warbirds over Wanaka Community Trust chairman John Gilks said the board of trustees were left with no option but to cancel following the decision to put the whole country into the red traffic light setting.
"The Government has indicated that the country will remain in red for weeks so we cannot continue to plan for an Airshow. The health and safety of the amazing team which delivers Warbirds Over Wanaka and all our visitors is paramount," Gilks said.
"We know this will be a huge blow for all those people who have worked hard to pull this event together, especially following on from the disappointment of being one of the first major events in New Zealand to cancel because of Covid back in March 2020."
Gilks said a huge effort goes into organising a big event like Warbirds.
"Our small management team is backed up by hundreds of aircraft owners, pilots, volunteers, contractors, suppliers and exhibitors, along with our funders and sponsors, to deliver what is regarded as one of the world's best Warbirds airshows.
"We are also extremely disappointed for the numerous businesses, not just in Wanaka but around the region, which benefit hugely from the Airshow. We know they were upset when we cancelled back in 2020 and they were looking to our event this Easter as a major financial boost given the tough times they have faced over the past almost two years."
The show was set to be a major part of the Royal New Zealand Air Force's 85th Anniversary celebrations.
Wānaka Community Board member and owner of Ritual Cafe Chris Hadfield said it will greatly affect the town.
"Particularly the evening and nighttime dining, those sorts of things. It's just going to slow the economy down for that period of time," he said.
Hadfield said day-to-day trading has not been affected much under the traffic light system.
"The issue really is that it's going to cancel warbirds, Challenge Wānaka, maybe the A and P show, that bring in those kiwi dollars that we need at this time of year to take us through."
The next Warbirds Over Wanaka International Airshow is expected to be held in Easter 2024. Ticket holders will be offered a full refund.