The government has announced plans to support regional air routes with up to $30 million in loans for small passenger airlines, saying the move is aimed at keeping communities connected.
Regional Development Minister Shane Jones said reliable air links are essential for many parts of the country.
“Reliable air services are critical for the economic and social wellbeing of regional New Zealand. They enable access to healthcare, education, business, and whānau, particularly in areas where other transport options are limited,” Jones said.
He acknowledged smaller airlines are struggling with rising costs, limited access to capital and the lingering effects of COVID-19. “Without this support, some communities risk losing vital air links and potential regional development,” he said.
Associate Transport Minister James Meager stressed the loans are not a bailout but targeted support.
“The aim is to stabilise the sector and support regional routes in the short to medium term. This is not intended to meet all the airlines’ capital needs but to provide targeted relief for such things as aircraft leasing, maintenance and debt refinancing,” Meager said.
As part of the package, Cabinet has also approved funding for a digital upgrade that would allow smaller carriers to integrate with the booking systems of larger airlines.
The move, known as interlining, would mean passengers could book a single itinerary across multiple airlines and streamline baggage handling.
“Streamlining bookings and baggage-handling between the smaller carriers and the bigger players in the aviation sector will make it much easier for the travelling public to plan and book their preferred routes in one go,” Meager said.
Jones said the government was stepping in now because many regional airlines are at risk of scaling back or withdrawing routes.
“Without intervention, our regional airlines face further service cuts or a complete withdrawal from routes, as we’ve seen in some regions around the country. Once fleet capacity is lost, recovery is difficult and costly. We’re acting now because a combination of factors, including the ongoing after-effects of the pandemic on air services, are placing exceptional pressures on the sector at present,” he said.
He added the move is about ensuring smaller towns don’t get left behind. “This Government is committed to ensuring that all regions, not just the main urban centres, remain connected and included in the national economy. This is a one-off, modest but meaningful intervention that will help prevent further service loss and protect regional connectivity.”
The loans will be administered by Kānoa Regional Economic Development & Investment Unit, with applications opening soon on the Grow Regions website.
