Members of the 157 sailors and marines, of the armed forces of the Philippines contingent joining the United Nations Peacekeeping Force in Haiti, stand at attention an oath during a sending-off ceremony, as a Philippine Airlines plane flies overhead, at t
IN PHOTO: Members of the 157 sailors and marines, of the armed forces of the Philippines contingent joining the United Nations Peacekeeping Force in Haiti, stand at attention an oath during a sending-off ceremony, as a Philippine Airlines plane flies overhead, at the Villamor air base in Pasay city, metro Manila September 22, 2014. The troops will be tasked to provide perimeter security for the force's headquarters of the UN Mission in Haiti, a naval press statement said. Reuters/Stringer

In a business revamp, the New Zealand Air announced withdrawal of its services from three towns and some regional routes. It also decided to shut down the subsidiary "Eagle Airways". This is part of the airline's exercise to focus more on popular routes and reduce the attention on loss-making regional services.

New Investment

New Zealand Air will be investing $100 million in planes in popular routes. Among the economically unviable routes from where the airline will suspend the services include--Kaitaia - Auckland; Whakatane - Auckland; Whangarei - Wellington; Taupo - Wellington; Westport - Wellington and Palmerston North - Nelson. The Hamilton - Auckland service will be stopped from February 2016, reports NZ Herald. Eagle operates the small 19 seat aircraft in the regional routes. Despite being the smallest in the fleet, the cost per seat is high because the fixed costs of operation are distributed across a few passengers.

According to Air New Zealand chief executive Christopher Luxon, "Eagle Airways has been losing $1 million per month for the past two years". The CEO said the news might be disappointing, but assured that Air New Zealand will come up with an innovative regional business model for future success.

Regarding the Eagle Airways' staff , he said the management, staff and unions will have to begin a process of determining the future of the business. The airline has 232 employees and there are "redeployment opportunities across the rapidly growing Air New Zealand group", he said.

New Regional Fares

There is a plan to introduce a range of new regional fares that will cut the cost of travel by average 15 percent and make it lucrative. Eagle Air, as a regional airline, has been flying under Air New Zealand's Link brand, connecting New Zealand's rural towns with its Beech 1900 aircraft. Eagle Air will cease operations from August 2016, the union said.

Stuff Co. Nz reports that Air New Zealand's new decision has frustrated Palmerston North and Nelson residents. Direct flights between Nelson and Palmerston North were restarted last year after a four-year gap. That time Air New Zealand promised that in 2015 it would make be inducting a larger plane. But the new announcement meant that the airline will be scrapping the existing flights, altogether. Palmerston North MP Iain Lees-Galloway expressed disappointment and said it was setback for people who were trying to develop the city as a sought after destination.