JETGO Australia is suspending its services on the Gladstone to Sydney route from February 9.
JetGo CEO Jason Ryder said despite strong support from the Gladstone community and 5-star reviews of the service posted on social media, travel patterns have been quite variable and quite directional.
Whilst certain flights had solid patronage, he said others were operating near empty.
Additionally the airline had found it difficult to obtain corporate support for the services which was vital to the viability of the service.
Mr Ryder said ongoing support from the major players in the area would have complemented the local demand and provided cheap tickets for the leisure traveller.
"However this was not to be with many of the larger corporations locked in to their 'status' credits with the major airlines, even if it meant far longer transit times and more expensive tickets," he said.
"It was disappointing to see that we had a product that was superior and offered at a reasonable price, yet some decision makers choose to take an often more expensive option that offered at best four hour transit times.
"Despite patronage slowly building the future modelling predicts it would take at least six months before the flights would get to break even. So we have made the decision to redeploy the aircraft to more profitable parts of the business".
Mr Ryder said JetGo wanted to thank passengers that had supported the service, and the Gladstone community.
"We apologize for the inconvenience this will cause some customers," he said.
"We also wish to particularly thank all our staff and crews establishing what has been an outstanding product that has received many accolades from the people who have flown with us".
Flights up until February 8 will operate as scheduled. Passengers booked from February 9 onwards will be offered a full refund.
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