Regional Flights Get $30M Lifeline – Govt Announcement
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New Zealand Government Announces $30 Million Loan Scheme for regional Airlines
The New Zealand Government will provide up to $30 million in loans for struggling regional airlines as it intervenes with a “one-off” move to prevent more air routes from being cut.
The money will come from the coalition’s Regional Infrastructure Fund and is expected to be a “one-off” measure to “stabilise the sector” in the short-to-medium term.
Regional Development Minister Shane Jones said regions faced further cuts to flights, including the total withdrawal of services, without aid from the government.
Carriers including Air Chathams and Sounds Air had been calling for a loan scheme for months amid a period of skyrocketing operating costs.
“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,” Jones said.
Smaller carriers warn they may have to sell aircraft and exit more routes. (Source: 1News)
“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 added: “Small regional carriers are under pressure from rising costs, limited access to capital, and ongoing post-Covid disruptions. Without this support,some communities risk losing vital air links and potential regional development.”
But the Government support comes after carriers have already had to make tough calls.
In July, regional airline Sounds Air announced it would sell five aircraft and cut two routes from later this month, blaming rising costs