Air New Zealand confirmed it would continue services to Sydney, Brisbane and Melbourne - albeit on a seasonal basis.
The Sydney and Melbourne services would be offered over a shortened summer season, with the Brisbane service to be offered during the peak winter months.
The announcement effectively means there will be no transtasman flights in February, March, April, or November.
Air New Zealand Tasman Pacific Airline general manager Glen Sowry said the "reductions on our Tasman network are not unique to Dunedin, with changes to frequency and capacity occurring across a number of routes as a result of fewer people flying in the current economic climate".
"We're determined to make transtasman services from Dunedin a success and I hope we continue to get the support of the region and see all transtasman routes grow."
However, Tourism Dunedin chief executive Hamish Saxton said it was "extremely disappointing" not to have services for a third of the year.
The airline had chosen to operate at times of the year when the routes were profitable, and "it makes it very difficult for us to market Dunedin if there is a restriction in flights".
"It is not an attractive proposition to promote these services - they are infrequent and too limited."
The move would lead to fewer Australians visiting Dunedin, with more Otago people opting to fly from Christchurch, which is "proving to be too attractive for Southern travellers".
One Dunedin-based travel agent said Air New Zealand's decision would open up the opportunity for competitors to fly the route.
"The move leaves a gap for a competitor," Vincent George House of Travel director Vincent George said Offering transtasman flights for reduced periods was "the writing on the wall" for the airline, effectively giving competitors the opportunity to operate from Dunedin International Airport, he said.
Air New Zealand flights from Dunedin were too expensive and passengers were electing to fly from Christchurch, which benefited from competition on the transtasman route, Mr George said.
Dunedin International Airport chief executive John McCall declined to comment on the announcement.
In previous years, the Dunedin-to-Sydney route had been offered up to three time a week all year long, the Melbourne route twice a week during a seasonal period, and the Brisbane route up to three times a week year-round.
In February, Air New Zealand announced it was suspending the Dunedin-to-Sydney service and reducing its Brisbane services because of poor demand.
EPMU national industry organiser for aviation Strachan Crang said the union had not been notified of any redundancies of Dunedin ground staff or air crew.
The Dunedin flights were crewed by Zeal 320 staff, who were currently taking industrial action, but there had been no notification of any staff reductions as a result of the Dunedin cutbacks.
The union had some members who were employed by NZ Customs, although none in Dunedin.
However, the union understood NZ Customs would be restructuring as a result of losing some transtasman services.
FLIGHT SCHEDULE
Air New Zealand transtasman services from
• DunedinTo Sydney: Will fly twice a week, on Mondays and Fridays, between December 4 and January 29.
• To Melbourne: Will fly once a week on Thursdays between December 17 and January 28.
• To Brisbane:Will continue to fly twice a week (once a week in May/June) until October 10.
May fly the route next year, depending on market conditions.
