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KiwiRail's decision to suspend its Coastal Pacific service between Christchurch and Picton over winter has been described by the rail union as "shortsighted and misguided".
KiwiRail announced today it would suspend the service over the winter from next month, prompted by decreasing passenger numbers and ongoing losses.
The business was losing almost $3 million annually, largely due in most part to a "significant drop" in the tourism and domestic travel market to and from Christchurch since the earthquake, said KiwiRail general manager passenger Deborah Hume.
Winter demand was typically much slower than the summer but the added impact of the February 2011 earthquake meant travel to and from Christchurch had dropped significantly.
KiwiRail needed to sell 130 seats on each service to break even, and on some days the number was as low as 30, she said.
Initiatives such as scenic carriages, a new menu and packages including whale watching and wine tasting have been introduced since 2011 to try and boost passenger numbers.
"However, we still have a business to run and the revenue loss from the drop in passenger numbers is not sustainable," said Ms Hume.
Rail and Maritime Transport Union General Secretary Wayne Butson challenged the decision, saying suspending the service would reduce much-needed tourists to the region.
"To suspend the service over the winter months is short-sighted - it sends a signal to tourism operators overseas that our own Government lacks faith in the rebuild of Christchurch and the resurgence in tourism in the South Island and beyond.
"There are plenty of businesses in the South Island who benefit from the tourist dollars that services like the TranzCoastal bring in," he said.
The Coastal Pacific service is operating for an extended summer between October and April.
The service will close for winter from May 5 and resume again at the start of October.