AirAsia X will stop flying between Kuala Lumpur and Christchurch at the end of May, just over a year after the service started.
The low fare affiliate of AirAsia has announced the suspension of its services to Christchurch as part of a realignment of its network to focus on its core markets.
The current four times weekly flights between Kuala Lumpur and Christchurch will be suspended with the last flights on May 30 from Kuala Lumpur and the return next day.
AirAsia X will offer passengers who hold bookings after these dates an option of a full refund, a re-route to another AirAsia X destination or a re-book of a return flight prior to May 31, all at no extra charge.
The decision follows the airline stopping its European and Indian routes early this year to improve operating cost efficiencies and concentrate capacity in AirAsia X core markets of Australia, China, Taiwan, Japan, Korea and Iran.
CEO of AirAsia X Azran Osman-Rani said the decision to withdraw from Christchurch was a difficult one, but was made "taking into account our strategic focus in consolidating our network on markets where we have built up stable, profitable routes".
Osman-Rani said the Kuala Lumpur - Christchurch route has performed strongly in terms of demand since its launch in April 2011, recording close to 80% loads in 2011.
However, the Christchurch route has been impacted by the spiraling cost of jet fuel which has increased by more than 30% since the launch, he said.
"The high cost of fuel has compromised our ability to offer our renowned low fares."
Dismay at Christchurch Airport
Christchurch International Airport CEO Jim Boult says he is very unhappy the airport will lose its direct link to Kuala Lumpur.
"We are bitterly disappointed at the airline's decision to end the Kuala Lumpur to Christchurch direct flights, but understand the situation AirAsia X finds itself in," Boult said.
AirAsia X began planning the Christchurch-Kuala Lumpur service in early 2010.
Boult said the increase in fuel prices since that time has put huge pressure on the airline's low cost model, and, combined with the length of the Kuala Lumpur to Christchurch sector, has made the service unprofitable for the airline, which has been offering fares as low as $99.
He said forward bookings for the next couple of months are promising, despite the airline recently withdrawing its connecting flights to Europe on which many travellers relied.
"We are very sorry to see AirAsia X depart, but sincerely hope we can welcome it back in the future."
Boult said he feels greatly for the tourism industry in the South Island.
"Many operators have told us how much the AAX service has delivered in direct new business, so this loss will be felt through the entire industry".