Low-cost carrier Jetstar has pulled out of a number of domestic New Zealand routes, citing profitability.
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"We have given it a real go," Jetstar chief executive officer Gareth Evans said.
"However, despite four years of hard work our regional network continues to be loss-making."
Five routes, encompassing up to 130 return services each week, have been axed.
They are Auckland to Napier, to Nelson, to New Plymouth, to Palmerston North, and Wellington to Nelson.
Jetstar's other domestic routes - which service Auckland, Wellington, Christchurch, Dunedin and Queenstown - will not be affected.
"The New Zealand regional market is facing some headwinds, with softer demand and higher fuel costs and we don't see the outlook changing any time soon," Mr Evans said.
"We are fully committed to our domestic jet services. It's business as usual for the rest of our New Zealand operation."
Up to 70 employees are affected by the cutbacks, with Jetstar management to offer them alternative employment options across its New Zealand and Australian operations.
The services will cease at the end of November, with passengers who booked flights beyond then to be offered full refunds.
The pullout has raised fears that the only other major Kiwi airline, Air New Zealand, will raise fares.
Instead, the country's flagship carrier responded by offering discounted airfares - for the same route on the same day - for no more than $50 to any affected customers.
The airline also committed to holding its "lowest lead-in fares" on affected routes to their same prices until the end of next year.
Finance Minister Grant Robertson said the government wouldn't be intervening to set price ceilings.
"We've had times in the past in New Zealand where we haven't had other operators on those regional routes. We'll have to see whether another one emerges," he said.
"Clearly there's an expectation from New Zealanders that there are fair prices paid."
Australian Associated Press