The Tourism Minister told the Otago Daily Times the suspension would have an impact on tourism locally and "put added pressure on the region".
Transtasman routes were "one of our most important gateways to New Zealand" and he would work with the airline to continue services out of Otago.
"While it's not appropriate for the Government to intervene in a state-owned company's operations, I will continue to try to work with Air NZ on maintaining and re-establishing services."
On Monday, Air New Zealand announced it would suspend its Dunedin to Sydney service from April 16 to October 24 and reduce flights to Brisbane to one service a week during May and June because of poor passenger numbers.
On Friday, the airline also announced it would suspend transtasman services from Hamilton.
Air New Zealand Tasman Pacific Airline general manager Glen Sowry said the airline would work with the Government, regional government and tourism bodies to maximise tourists to New Zealand and "as alluded to by the Prime Minister, we will continue to do this".
Mr Sowry said he "absolutely" stood by his comments to the ODT in June that the airline was "focused on making Dunedin successful".
Dunedin International Airport Ltd chief executive John McCall said he was "gutted" by Monday's decision - the worst news he has experienced in 20 years of managing the airport, which is jointly owned by the Dunedin City Council and the Crown.
He welcomed Mr Key's message but criticised Air New Zealand for its handling of Dunedin.
"They had a monopoly and they failed," he said.
Last year, international passenger numbers dropped 12% to 65,000, a mix of poor marketing and the changeover from lower-cost Freedom Air, he said.
Three years ago, the number of international passengers was 94,000.
"Since [the demise of] Freedom . . . Air New Zealand really has lost ground and slowly reduced frequency and capacity from Dunedin."
While the number of people flying from Otago and Southland was the same, passengers, including some of his own staff, chose to fly out of Christchurch for the cheaper prices.
"Air New Zealand simply haven't been competitive out of Dunedin."
He confirmed the airport was in talks with Jetstar, Pacific Blue and Qantas about flying the transtasman route. "But we are also committed to working with Air New Zealand."
