Dunedin air services cut as costs rise

Flights out of Dunedin International Airport have been cut as airlines struggle with surging fuel prices and a drop in demand.

Mainland Air has stopped its service to Invercargill after just six weeks, while Air New Zealand announced yesterday it was cutting its flights between Sydney and Dunedin from three to two between September and November.

The national carrier has also put up domestic fares on average about 4%, effective from June 16.

Air New Zealand chief executive Rob Fyfe said with jet fuel at very high levels, it was critical the company adapted its business, including fare adjustments, to recover significantly increased operating costs.

The company would not have its Wednesday flight between Sydney and Dunedin for seven weeks, starting in September.

He said costs were constantly being reviewed.

Mainland Air business manager Daniel McMillan said the patronage on the Invercargill flights was not high enough to continue demand, with only one or two passengers on board.

The company started the flights only six weeks ago but the high cost of fuel meant the company could not carry an unprofitable service for any length of time, he said.

The company used a 10-seat Piper Chieftain.

There was probably enough competition from road to make it hard for a service between Dunedin and Invercargill to work.

The company would continue with its service to Queenstown, which stopped at Alexandra when required, though Mr McMillan declined to say what was the average number of passengers.

He said the company was happy with its loadings into Central Otago and wanted to see how the service would perform during winter.

Flights to Queenstown started in November last year, and flights were on Monday, Tuesday and Friday.

Dunedin International Airport Ltd chief executive John McCall said the cutbacks were a sign of the times in the industry.

There was a slight softening in the market, he said, and Air New Zealand was making changes right across the network.

But there were still positive signs, he said, and the third Sydney flight would be back in November, along with Melbourne summer flights.

Pacific Blue was due to arrive next month, with a daily flight scheduled between Christchurch and Dunedin.

Spokesman Phil Boeyen said the service would start on July 1.

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