National carrier Air New Zealand is reviewing its regional network service due to a downturn in demand.
The airline says passenger numbers for its short haul flights are down 3% and is impacting its margins, according to The Dominion Post.
As a result, the airline is considering improving the way regional airline subsidiaries Eagle Air, Air Nelson and Mount Cook Airline operate.
Air New Zealand says it may consider carrying out maintenance for regional aircraft under one roof to save money and reduce the amount of time aircraft spend on the ground.
The airline says cost savings are not aimed at job cuts but it has warned smaller towns may lose their service if passenger numbers do not pick up.
The review comes as budget airline Pacific Blue aims to break Air New Zealand's grip on the regional market.
Pacific Blue is touring its new 104-seat Embraer jet around the provinces to gauge airport capability and customer support.
