The last census would disagree with you. 85k of greater Sydney residents born in NZ, but there are 157k (includes the 85k) with NZ ancestry.
Highest concentration of NZ born residents remain in Sydney's eastern suburbs and inner-city areas. Yes Blacktown is the suburb with the highest number of NZ born but the next 3 with most Kiwis are Mosman (north), Randwick (East) and Port Macquarie (far north).
I'm not saying there isnt a market in Western Sydney for cheap NZ flights, hence Air NZ offering only a domestic single class aircraft; but demand for NZ flights will still be greater at SYD where you have a choice of J or Y cabin on most flights (and even F if you choose EK or the QF JFK flight).