Jetstar's New Zealand operations will remain suspended until at least September 6, the airline announced this morning.
The Qantas-owned airline said the decision was made following the Government's extending of COVID-19 alert level 3 restrictions in Auckland.
"As a low-cost carrier, Jetstar is unable to continue its operations in New Zealand whilst there is a requirement for airlines to keep the middle seat free," the airline says on its website.
"The limitations on the number of customers that are allowed onboard our aircraft make the operations of our flights unviable."
Jetstar says impacted customers will be contacted and offered a range of options such as changing their travel dates at no cost, or a credit voucher with the airline.
On Monday night, Air New Zealand said it would continue to operate a reduced domestic schedule to and from Auckland while the city is at alert level 3, but most of the airline's domestic schedule will remain unchanged.
Air NZ Chief Executive Officer Greg Foran says customers flying from Auckland have been required to wear masks since the alert level was changed to level 3, and it has been recommended for customers travelling from other cities.
"We will now start to review our domestic network and will be contacting customers who may be affected by the extension of current alert levels," he said.
"We understand the impacts these disruptions cause to our customers and we'll do our best to get our customers to where they need to be."
The airline's fare flexibility remains in place and it encourages those who no longer wish to fly to convert their fare into a credit through its online booking tool.
