Jetstar Airways (JQ, Melbourne Tullamarine) has announced it will curtail its domestic New Zealand market presence with effect from November 30, 2019, citing insufficient demand on select routes served with its Dash 8-300 fleet.

The Australian carrier began flying in New Zealand in December 2015 to cover a gap in the country's market left following Air New Zealand's decision to withdrawn from a number of regional routes.

Using three Dash 8-300s wet-leased from fellow Qantas Group subsidiary Eastern Australia Airlines (EAQ, Tamworth), Jetstar currently connects its Auckland International base with Napier/Hastings, Palmerston North, New Plymouth, and Wellington via Nelson, NZ. It also connects Auckland with Wellington, Christchurch, Dunedin, and Queenstown International using A320 Family jets.

According to the ch-aviation capacities module, Jetstar currently accounts for 53,880 seats/week or 16.44% of the domestic New Zealand market. By comparison, Air New Zealand controls 265,810 seats/week or 81.09%.

However, four years down the line, Gareth Evans, Jetstar’s Chief Executive Officer, said the airline could no longer justify using the turboprops in the New Zealand domestic market given losses incurred as a result of higher costs and weak demand.

“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. As a result, we’re announcing a proposal today to end our regional services, with the final flights on November 30 this year,” he said in a statement.

“We have given it a real go. However, despite four years of hard work, including becoming the most on-time of the two major regional airlines and having high customer satisfaction, our regional network continues to be loss-making."

Jetstar reiterated that it will, however, continue to ply domestic trunk routes using its A320 Family fleet.

“We are fully committed to our domestic jet services. It’s business as usual for the rest of our New Zealand operation," Evans added.

Meanwhile, Air New Zealand's Chief Revenue Officer, Cam Wallace, has said the carrier will explore opportunities to add further capacity to the routes affected by Jetstar’s planned withdrawal over the coming weeks.

“Air New Zealand currently has 51 aircraft operating 320 flights per day to regional centres. We will evaluate the demand outlook on the affected Jetstar routes and determine whether we have the flexibility within our current fleet to add more capacity,” he said.