The Regional Infrastructure Fund will provide funding to help regional airlines manage the operating pressures facing the sector.
Regional Development Minister Shane Jones said that regional airlines have been navigating a period of ongoing challenges and significant pressures, including the price of jet fuel and aviation gas increasing by more than 50 percent since March, which has created problems for the operators providing much-needed regional connectivity.
Therefore, Ministers have agreed to make NZD 5.7 million from the Regional Infrastructure Fund (RIF) available for working capital grants for regional airlines.
Jones emphasised that this support was temporary, targeted and proportionate, and the funding will help maintain service levels and preserve essential regional routes that might otherwise be vulnerable.
“We are providing realistic, practical support so regional airlines can maintain essential connections for remote and regional communities, giving people in those areas access to specialist health care, family, and business opportunities," he said.
The working capital grants will come from the remainder of the RIF-funded regional air connectivity package set up in 2025 to support vulnerable regional air services. The Government has provided nearly NZD 26m in loans to date for aircraft acquisition or leasing, fleet maintenance and debt refinancing.
The working capital funding allocations will be based on airlines’ annual passenger volumes and flight movements, with grants ranging from NZD 300,000 to NZD 1.2 million depending on the scale of the airline’s operation.
The following loans have been provided to date:
- Air Chathams – NZD 17.2m to refinance debt
- Sounds Air – NZD 4.5m to upgrade its fleet and refinance debt
- Island Air – NZD 252,000 for fleet maintenance
- Golden Bay Air – NZD 1.1m to refinance debt and fund essential ongoing maintenance
- Stewart Island Flights – NZD 640,000 for aircraft refurbishment
- Sunair - NZD 2.08m for new aircraft, fleet maintenance, and debt refinancing
Associate Transport Minister James Meager added that grants for day-to-day costs such as fuel and wages are being provided with an expectation that the airlines will maintain their current service levels, as was the case with loans from the regional air connectivity package.
This support will provide some financial relief over the next 12 months and demonstrates the Government's commitment to the regions, their airlines, communities and businesses.
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