Virgin Blue Holdings Ltd (ASX: VBA) waited three long years, anticipating for the clear sky that never came, and following losses of millions of dollars, the airline company finally gave up on New Zealand as it announced on Monday that it would halt its flights within the country.

The company said that 737 aircrafts servicing domestic routes in New Zealand would be redirected to regional flights between Tasmania and South Pacific routes as Virgin Blue chief executive John Borghetti conceded that competing with two other airlines for the country's miniscule population of four million makes no business sense in the long run.

Mr Borghetti told BusinessDay that Virgin Blue sees no further promise of chalking up some profit on the air domestic market of New Zealand, so the company decided that ceasing flights within the country is the most prudent thing to do for now.

Instead, the company would re-channel its resources on other viable service routes and for a start, V Australia is set to cease long-haul flights to Fiji and would be replaced by Pacific Blue's 737 planes, with eyes on possible routes to Melbourne-Denpasar, Perth-Phuket, Melbourne-Christchurch, Brisbane-Dunedin and Brisbane-Hamilton.

Mr Borghetti explained that the adjustments were decided to maximise the company's resources, in which planes were redeployed to appropriate routes and capacities were re-assessed and re-adjusted.

The company is also fine-tuning its US operations to arrest further losses it already incurred when it started servicing direct flights from mainland Australia to America last year as it found itself in fierce competition with Qantas, United Airlines and Delta.

V Australia flights from Sydney to Los Angeles are now scheduled to fly early mornings to enable passengers same-day connecting flights to the east coast and by December, more flights would be added on the same route in anticipation of the surging holiday season travellers.

Virgin Blue added that flight routes from Melbourne to Johannesburg, LA and Phuket would be serviced by V Australia, which is set to fly weekly on each destination.

As of 1153 AEST, Virgin Blue shares were trading at 29.5 cents, shedding a bit of its value by 0.5 cents.