However, the same plane is being offered for the Wanganui-Wellington service.
Sounds Air General manager Andrew Crawford said the service from Masterton was still on the cards.
"We've been looking at Wanganui and Masterton to see which is going to be better."
A decision will be made public next week, he said.
Wanganui mayor Annette Main told the Wanganui Chronicle the possibility of a replacement air service for the town was welcome news.
"We look forward to Sounds Air's confirmation of the introduction of a service next year."
Masterton Mayor Lyn Patterson said at the end of the day, it was up to the airline.
"That's the decision Sounds Air will make on a commercial basis."
She was not overly concerned if the plane went to Wanganui as she believes the best long-term solution is to have a direct link to Auckland, rather than Wellington.
"Ideally the direct link between Masterton and Auckland is what we need to have reinstated.
"My preference will always be to have a direct link, that's what has to happen."
Wairarapa MP John Hayes has been in talks with other flight providers about filling the gap Air New Zealand would leave.
In October, he said he was seeking community support to show potential providers the Auckland-Masterton link was viable.
Mr Hayes said the size of some of the providers' planes meant the Masterton airport runway would have to be extended. "We have a number of issues to work through, including whether the present runway will be sufficient for different types of aircraft than those used by Air New Zealand."
Mr Hayes said he was looking for a firm understanding of who would use the service, when, and how often at a price of about $300 for a one-way trip to or from Auckland.