Members of public and transport lobby groups are raising red flags about resiliency issues resulting in Aratere's retirement.

KiwiRail has announced that the Interislander ship will retire by the end of August and has warned that it would affect capacity for the service with their fleet reduced to two ships.

The Aratere is the only vessel in the Interislander's fleet which is rail enabled, which means rail freight can roll on and off it.

That means it can't use another wharf in Picton, while port upgrades there and in Wellington are underway for two new ferries set to arrive in 2029.

It could also reduce jobs associated with the ships.

Interislander executive general manager Duncan Roy advised passengers to book their trips early, especially for peak season around Christmas time.

"We don't have full ferries all the time with three [ferries], so we'd expect to have fuller ferries and, probably, people will be travelling at non-traditional times - earlier in the morning, later in the evening," he told Morning Report.

Roy would not say whether prices would increase after the Aratere retires but assured there would be no price-gouging.

"Nothing considerable... there could be a price increase anytime, but we watch our prices and monitor them like any good business. We work hard to keep the cost down."

RNZ asked Wellingtonians what they thought of the news.

Jenna said that it would be annoying to have to travel at less popular times.

"Nobody's going to wake up early to go on transport to get somewhere, that's just really annoying actually."

She said it would make her think more about flying across Cook Strait rather than sailing.

Jackie told RNZ the decision to retire the ferry was short sighted.

She said the Interislander ferries were an essential link and it needed to have appropriate levels of capacity.

"Really important, and really important that its rail enabled."

Evan told RNZ the ferries sailed at "pretty odd times" now.

"So, if they are reducing the fleet, it's only going to make things worse."

He said it could make people look at other travel options and he was concerned about prices on the service going up.

Transporting New Zealand chief executive Dom Kalasih told Midday Report the lower number of ships could have flow on effects if one is taken out of service suddenly.

"It is almost a given that a ferry will be out for unplanned reasons and so it's what sort of disruption is caused then and how that's managed."

Kalasih said it was not clear yet whether the cost of freight would go up, but that there was increased risk of price increases.

New Zealand motor caravan association Bruce Lochore said the Aratere's retirement would make travelling across the Cook Strait "a little tougher".

"It's going to be at capacity just about full time and the risk of one breaking down is a concern."

Lochore said the fact that there was less capacity meant there was more risk of prices increasing.

"We'll just have to watch that, but we haven't had any indication from Interislander that they are looking at price rises at this point."

Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.