Air New Zealand has announced it is cutting international flights from Hamilton in the Waikato to Australia and the South Pacific after news that international passenger numbers dropped by almost 16 percent to 87,000 in the year ending June 30, 2008.
The only international service remaining will be the Hamilton - Brisbane route to be cut from three to two flights per week.
Air New Zealand entered the Hamilton international market through its subsidiary Freedom Air to compete with upstart Kiwi Air in the mid 1990s. Kiwi Air failed and Freedom Air was wound up earlier this year.
Having seen off the competition and against the backdrop of a weakening global economy, Air New Zealand will want to consolidate operations in Auckland since Hamilton lies within the population catchment of Auckland, being an easy drive to Auckland.
Although Hamilton is New Zealand's fourth largest city, its population is only about 164,000 (2007) so provides a very thin base for international passenger numbers. A more competitive airline market in Auckland has also meant that travelers have found it cheaper to fly in and out of Auckland, rather than Hamilton, when taking trans-Tasman or South Pacific flights.
Unfortunately, Hamilton will bear the brunt of the cost associated with recent upgrades of its terminal, costs that will now be more difficult to recover until some future date when international flights might be expanded again.
Air New Zealand also announced a reduction in international flights out of Dunedin in the South Island with flights to Brisbane and Sunday being cut from seven to five per week.