Singapore Airlines' "Capital Express" route offering direct flights from Wellington to Canberra has been axed 16 months after it was announced.
The tax-subsidised flight, which carries on to Singapore, will now go through Melbourne four times a week.
The change "enhances economic opportunities for the region", said Wellington Regional Economic Development Agency (WREDA) acting chief executive Derek Fry.
"A Wellington-Singapore via Melbourne service will provide more opportunity for Wellington.
"The opportunity for our region from Southeast Asia and across the Singapore Airlines network is still excellent, but Melbourne itself is a large market for Wellington with plenty of potential for growth both in the tourism and business sectors."
The change would also increase the tourism potential between Wellington and Victoria, he said.
It was "well-timed for business-related travel and of course gives Wellingtonians more travel choice to an Australian city that's widely liked here".
Calling it a shame to lose the direct connectivity with Canberra, Fry said nevertheless a strong awareness of Wellington as a tourism destination had been developed in the Australian capital.
But Jordan Williams of the Taxpayers' Union took a dimmer view of the change, calling the route's subsidies "corporate welfare at its worst" and saying it should be scrapped.
"The Wellington-Canberra route should never have been subsidised in the first place," he said.
"Now that the spending has proven to be a complete waste, you would expect WREDA to scrap it.
"Instead, the agency says they'll subsidise the new route – despite there already being regular flights between Wellington and Melbourne."