Air New Zealand is to reduce its trans-Tasman flights to and from Dunedin by a third, prompting concerns for the tourism industry and businesses in one of the country's main centres.
The national carrier is to drop flights for the four low season months of February, March, April and November.
Flights to Melbourne and Sydney will continue for a shortened summer season and Air New Zealand will offer flights to Brisbane in peak winter months.
Tourism operators are disappointed, but hope the move could open up opportunities for other airlines to compete in the Dunedin travel market.
But there are fears the South Island city's tourism and businesses may struggle due to the cutbacks.
Tourism Dunedin chief executive Hamish Saxton says direct links between Dunedin and Australia are vital to attract business and promote New Zealand as a safe place to go on holiday.
Mr Saxton says the political strife in Fiji and Thailand makes New Zealand more attractive as a holiday destination for Australians, and he is concerned the absence of a regular direct trans-Tasman service will hurt businesses.
However, he acknowledges Air New Zealand is responding to difficult economic conditions and says it is the only international airline to still fly directly in and out of Dunedin.
Air New Zealand's Tasman Pacific Airline general manager Glen Sowry says the airline has to respond to the reality that fewer people are making overseas trips.
Mr Sowry says the planned flight schedule for Dunedin is sustainable and it is hoped more frequent flights will be restored once global economic conditions improve.
Air New Zealand, meanwhile, is marketing cost-effective flights in the Otago region, he says.