VIRGIN Australia will significantly reduce its Tamworth-Sydney flights with poor passenger numbers cited as the main factor.
It is understood the morning and evening services will be scrapped with one daily return service retained.
With the airline weakening its share of flights slots in Tamworth, it is not yet known whether this will have a broader effect on airfare costs.
Tamworth mayor Col Murray labelled the move disappointing and "another indication of the tough economic times we are facing."
He said it was too early to tell whether it would increase the cost of Tamworth airfares across the board.
"There is still competition in there and that is the critical part from the marketing point of view of council," Cr Murray said.
"Virgin would still be seeking to maintain their not-insignificant share of the market.
"We will hopefully see those stay the same."
Stalled growth in passenger numbers was blamed for the reduction in services.
Cr Murray refuted suggestions the airport's fee and charges played a part in the decision.
"When you see where our fees and charges sits within the broader marketplace, ours, in almost all cases, would be considered quite low, he said.
While it could be seen as a chance to lobby airlines to provide cheaper regional fares, Cr Murray conceded it was a tough time for the airline industry.
"The comments and commentary we hear from the industry is the pressure on their finances and we are seeing their returns drop and their shareholders' returns are dropping," he said.
"That would represent a fair indication the industry in tough times."
Earlier this year, an Australian Senate standing committee called for a productivity commission review of regional airfare costs.
The standing committee found high costs had a "direct and detrimental effect on the lived experience of residents" in regional areas.
The passenger flight retraction will have no bearing on Virgin's Tamworth pilot training academy and its progress.
Virgin Australia declined to give an on-the-record comment about the passenger-service decision.
It confirmed the current morning and evening flights would be scrapped in favour of 1.55pm Sydney-Tamworth service and a 3.35pm return flight.
VIRGIN Australia has announced it will significantly cut its services from Sydney to Tamworth.
In a statement on Wednesday, the carrier said it would reduce its Sydney-Tamworth service from twice daily to six services per week.
It comes amid a raft of fleet and network changes announced by Virgin on Wednesday.
Tamworth Mayor Col Murray said today's announcement from Virgin Australia to reduce its Tamworth services is "another indication of the tough economic times we are facing."
"Virgin has always indicated it is targeting the business market with its flights to and from Tamworth and today's announcement makes it obvious the interest is not there," he said.
"It is the sort of decision we don't want to hear but it is an indication of the tough economic times we are facing.
"We known the drought is having wide ranging effects on the economy and the aviation industry is also facing a tough business climate."
Tamworth's loss appears to be Port Macquarie's gain with the coastal town gaining four additional services in the regional schedule change-up.
Virgin Australia Group chief Paul Scurrah said today's changes highlight the airlines's focus on "disciplined capacity management and putting the right product on the right route".
"We maintain a strong network of destinations and it's important that our schedule continues to reflect demand from our business and leisure customers," Mr Scurrah said.
"Some of today's changes respond to shifting demand on some routes, and others are about re-focussing Virgin Australia and Tigerair Australia on the destinations we feel they are best suited."
Flight school not impacted by Virgin decision
Cr Murray said despite the reduction of Virgin flights local travellers are fortunate they will continue to have options provided by two other carriers.
Cr Murray confirmed today's announcement by Virgin Australia will have no impact on the plan to open a pilot training school at Tamworth Regional Airport.
"Following the announcement of the Foreign Investment Review Board approval last month, the planning continues to move forward as scheduled," he said.