The sudden decision by low-cost carrier Air Asia X (AAX) to axe its cheap direct flights between Christchurch and Kuala Lumpur is "regrettable" for Queenstown tourism operators, but other airlines could meet Asian demand to visit the resort and the rest of New Zealand.
Destination Queenstown chief executive Tony Everitt said he thought the loss of the link, announced on Monday, would be disappointing for the organisation's members. The connection had been "very helpful" in giving operators a boost in business, particularly from Malaysia, he said.
"Tourism New Zealand estimates the service created an extra 24,000 visitors to Christchurch. I would say a very large percentage of those 24,000 would have come on to Queenstown from the Malaysian market.
"In the short term, it might be a little bit more difficult for those visitors to come but, in the medium term, what we would emphasise is there are still four airlines flying from Southeast Asia to New Zealand non-stop, so we're encouraged to see that Tourism New Zealand, Christchurch Airport and DQ, to the best of our ability, will work with those other four carriers to try and pick up this demand to we can retain some or all of that business long term."
Mr Everitt said it was a business decision by Malaysian-based AAX and nothing to do with the South Island. The airline also withdrew from India and Europe, which were much bigger markets than New Zealand, he said.
"It has been helpful, while they have been flying, to demonstrate that demand's there and there's an opportunity for other airlines to pick it up and bring those visitors to us."
Christchurch International Airport chief executive Jim Boult, of Lake Hayes, said he was "very unhappy" the airport would lose its direct link to Kuala Lumpur.
Mr Boult said the loss would be felt throughout the tourism industry as many operators noticed how much the AAX service had delivered in direct new business.
"We are bitterly disappointed at the airline's decision to end the Kuala Lumpur to Christchurch direct flights, but understand the situation Air Asia X finds itself in," he said.
"Air Asia X began planning the Christchurch-Kuala Lumpur service in early 2010. Since that time aviation fuel prices have increased by more than 30% and are forecast to stay high for the foreseeable future.
"That has put huge pressure on the airline's low-cost model and, combined with the length of the Kuala Lumpur to Christchurch sector, has made the service unprofitable for the airline, which has been offering fares as low as $99."
Mr Boult said the AAX direct flights from Kuala Lumpur to Christchurch had average loadings of almost 80%, with some months near 90%. Forward bookings for the next couple of months were promising, despite the airline recently withdrawing its connecting flights to Europe on which many travellers relied.
The airport invested years of work into attracting the carrier to the city and hoped the work could be banked as an investment in a future service, Mr Boult said.
The flights were introduced with $99 air fares from Christchurch to Kuala Lumpur in April 2011. The service was estimated to bring in $70 million to Christchurch each year and contribute to tourism growth in both New Zealand and Malaysia.
There were four flights a week between Kuala Lumpur and Christchurch. The last flights run on May 30 from Kuala Lumpur and May 31 from Christchurch.
