Duty Free Store New Zealand chief executive Grant Archibald, of Wellington, confirmed the company had made 35 staff redundant in the past three weeks, with the majority of redundancies coming from its Hamilton Airport operations.
Eight part-time staff had been made redundant from Dunedin operations, with seven part-time staff and a full-time manager remaining.
Earlier this year, Air New Zealand announced it was suspending the remaining transtasman flights from Hamilton, and suspending its Dunedin to Sydney service and reducing its Dunedin to Brisbane flights during low demand months.
"We were pretty disappointed by their decision," Mr Archibald said.
In Dunedin the company operates three duty free stores; at arrivals, departures and in the land-side area of the airport, as well as its Try Otago gift shop.
The arrival and departure stores would be staffed during departure and arrivals of flights, but did not warrant current staffing levels and the stores would close if transtasman flights stopped, he said.
Air New Zealand had "set themselves up to fail" by suspending transtasman services, and it was hoped other airlines would provide competition on the route, he said.
In another blow for the airport, a store aimed at promoting produce and products from the region, Otago Fresh Ltd, will close by the end of the month with the loss of one full-time and one part-time job.
"It is the sign of the economic times. People are simply not spending," director Prof Herbert Harris, who along with backers Sir Cliff Skeggs and Dave Humphrey opened the store on July 1 last year, said.
Declining passenger numbers on some routes resulted in Air New Zealand downgrading its aircraft from Boeing to smaller ATRs, resulting in passengers disembarking on the ground floor and bypassing upper-storey retailers.
"Without that foot traffic we were up against it," he said.
The store also operated a TAB betting site, which closed on Friday after the TAB requested a $15,000 bond to continue the operation - a standard procedure according to New Zealand Racing Board national retail group manager Bruce Proud-foot.
Paper Plus owner/operator John MacDonell said on Wednesdays - when there were no transtasman flights, was the slowest day for the business, but otherwise "we have had a good year".
"But we are concerned about how things will be next month when the transtasman flights are cut," he said.
The Otago Daily Times understands Customs was also reviewing staffing at the airport.
Dunedin International Airport chief executive John McCall said the airport continued to talk with businesses interested in operating at the airport.
While the suspension of transtasman flights was a concern, the number of passengers since the arrival of Pacific Blue had led to a 13% increase in total foot traffic for the six months to December, he said.
