Regional Airlines Face Collapse Amid Soaring Costs

Essential Routes Threatened as Carriers Seek Government Aid

New Zealand’s regional airlines are warning of potential service cuts and aircraft sales within months, citing unsustainable cost increases and a lack of government support. The situation threatens vital transport links for remote communities and healthcare access.

Parts Costs Skyrocket

Andrew Crawford, Chief Executive of Sounds Air, explained that the cost of essential maintenance parts has dramatically increased. A part we used to pay $26,000 for is now $72,000. He stated that despite rising passenger numbers, the financial strain is becoming unbearable.

Duane Emeny, Chief Operating Officer of Air Chathams, added that service providers, who previously held prices steady during the pandemic, have now implemented significant increases. Both airlines stepped in to maintain routes abandoned by Air New Zealand, including Wellington to Taupō and Blenheim to Christchurch.

Healthcare Access at Risk

Sounds Air has already discontinued flights to Taupō and Westport due to financial pressures. Crawford expressed concern that the Blenheim to Christchurch route, crucial for medical appointments, could be next. I think about 42% of that market is healthcare so it’s people flying up and down to Christchurch for treatment, day surgery, radiotherapy and chemotherapy.

Nadine Taylor, Marlborough Mayor, emphasized the importance of this route, stating, It’s not practical to set out in the middle of winter on a four-hour drive if you’re needing hospital treatment. According to data from the Ministry of Health, approximately 15% of New Zealanders live in rural areas and rely heavily on regional air services for specialized medical care. Ministry of Health Rural Health

Calls for Government Intervention

Air Chathams and Sounds Air are jointly requesting a concessionary loan scheme from the government to stabilize their operations. Emeny believes this would provide access to capital to maintain the service level you have now and to enable that further growth, as these are debts that would be repaid.

Crawford lamented that discussions with multiple ministers over six years have yielded no tangible results. They’ve all agreed at what point does someone start listening. Associate Minister for Transport James Meager stated in a release that the government is currently considering a range of options to address regional connectivity concerns and improve competition in our aviation sector – but are yet to make any decisions. He added that the possibility of concessionary loans is under review.

Without swift action, Crawford fears Sounds Air will be forced to reduce essential services and sell off more aircraft to ensure its survival.