Sounds Air will end its Blenheim to Christchurch and Christchurch to Wānaka flights at the end of September.
Despite reporting strong bookings, the airline says it can no longer manage “out of control” operating costs, forcing the suspension of the services.
The move will result in job losses for 10 staff at the Wānaka and Christchurch locations.
Last December, the airline cancelled its services from Wellington to Taupo and Wellington to Westport.
“In the last three months, we’ve had another half a million dollars of annual costs imposed on the business, and at some point, you’ve just got to say, ‘No more. We just can’t do it’,” Sounds Air managing director Andrew Crawford said.
He said the airline has been badly impacted by rising expenses, supply chain issues, and a struggling New Zealand dollar, all of which are endangering the survival of regional airlines.
Crawford explained that while they are transporting record numbers of passengers, expenses have become overwhelming, recruiting and retaining engineers has been a challenge, and they have explored every possible solution to keep the business afloat.
The company will now concentrate on its core regional routes, selling its five Pilatus PC12 aircraft and increasing its Cessna Caravan fleet, which serves the Cook Strait region.
“We are truly devastated that we have been forced into this position after five years of fighting for a solution,” Crawford said.
“It will mean the loss of a number of our dedicated and skilled staff, but we are also hugely disappointed for our incredibly loyal customer base who rely on us to get around New Zealand – not only for tourism and leisure purposes but also for regional access to critical healthcare and higher education and to do business that contributes to New Zealand’s regional economies.”
The airline will maintain its services on the Wellington–Blenheim, Wellington–Nelson, Wellington–Picton, Blenheim–Paraparaumu, and Nelson–Paraparaumu routes.