Downdraft of Jetstar’s pullout widespread

The sole winner from Jetstar’s cancelled regional routes this week is Air New Zealand — while the queue of losers is a long one. An estimated 20,000 passengers are booked for flights beyond November 30, when Jetstar pulls out. It’s bad news for those passengers, and for anyone travelling these routes, as competition kept ticket prices keen.

Jetstar flew regional routes to four centres — New Plymouth, Nelson, Palmerston North and Napier — for the past four years, making a significant difference to airfares on those routes.

However, the economics of flying to regions are tough. A bigger operation can make savings, and Jetstar faced the sheer scale of a national carrier in the same market which understandably competed robustly and strategically. Any operation losing $20 million a year isn’t going to fly for long.

The significance of regular flights at edgy prices is massive for regional economies. It’s why Hawke’s Bay

Any operation losing $20m a year isn’t going to fly for long.

Airport is completing a $20.2m expansion while Nelson has just opened a $30m terminal.

Hawke’s Bay air services campaigner Simon Nixon labelled the Jetstar withdrawal a “crisis” for travellers. “I think we’ll see airfares go up 25 per cent by Christmas,” he said.

Air NZ will be scrutinised — not the least by Regional Development Minister Shane Jones — for any hint of gouging on monopoly routes as the very economies of affected regions depend on these flights.

Everyone in these regions, from the cabbie at the airport to the accommodation for business travellers, will also feel the downdraft of Jetstar’s pullout.