Eagle Airways, a wholly-owned subsidiary of Air New Zealand and part of the national carrier’s Air New Zealand Link regional flight network, has announced it will suspend its flights between Christchurch and Wanaka from January 30, 2013 due to increased costs from landing fees and facility rental.

The small carrier operates a fleet of 18 19-seat Beech 1900Ds on behalf of Air New Zealand across a network of over 20 destinations providing regional links into Auckland, Christchurch, Hamilton and Wellington. It inaugurated daily services between Christchurch and Wanaka, a town in the Otago region of the South Island of New Zealand, in March 2004 but says it has always struggled to operate the route on a commercial basis.

Eagle Airways says that with the loss-making service “not projected to break-even in the near future,” it has been left with no alternative but to close the only link to the small town. Passengers now wishing to fly from Wanaka from January 30, 2013 will instead have to make an hour long journey by road to the larger Queenstown facility.

“For more than eight years we’ve worked hard to try to make this route work. We’ve tried increasing schedule frequency, different service timings, reducing fares, investing in promoting the service and working with local stakeholders; including suggestions around improving local infrastructure,” said Carrie Hurihanganui, General Manager, Eagle Airways. “All of this has proved unsuccessful and only added to the hundreds of thousands of dollars we have lost on this route over the years.”

According to Ms Hurihanganui this situation has been exacerbated by ongoing cost increases; including those at both the Christchurch and Wanaka ends of the service. Queenstown Lakes District Council increased rental costs at Wanaka Airport last year and Christchurch International Airport Limited recently declared a 63 per cent increase in landing fees from December, with another increase planned for July 2013. This is despite average fares for this market having reduced by four per cent over the past five years, according to the executive.

“To break even on the Christchurch – Wanaka route we would need to increase fares by over 40 per cent but the average fare is already higher than the average fare between Christchurch and Queenstown,” said Ms Hurihanganui. In 2011, Eagle Airways carried approximately 12,000 O&D passengers between Wanaka and Christchurch, with approximately 3,000 more transiting on at Christchurch to other destinations.