Airlines will quit New Zealand permanently and this country will be left behind the international travel recovery unless there is more action to re-open borders, says an aviation industry group.
The Board of Airline Representatives (Barnz) says international airline links are "hanging by a thread" and will break without a more nuanced government approach to opening up the country. The Government says its health strategy is working and it is looking at opportunities for quarantine-free travel.
Since Covid-19 hit, the number of international airlines servicing New Zealand has plunged from 30 to eight passenger carriers, and another four carrying freight only.
Barnz executive director Justin Tighe-Umbers paints a grim picture of the sector, which he says will get only limited help from the rollout of Covid vaccines next year.
In January there were 30 international airlines connecting directly to 44 cities and about 600,000 passengers coming into the country every month. International passenger arrivals are now down by 98 per cent to match the managed isolation and quarantine capacity of 13,000 people a month.
Widebody aircraft were typically carrying 20 to 30 passengers and Tighe-Umbers said it was only the "parachute" of the Government-funded freight subsidy scheme that was keeping international routes open.
He said a single 300-seat plane from a longhaul market added about $200 million a year in tourism revenue, carried $400m worth of cargo exports and was a "crucial conveyor belt of wealth" for New Zealand.
"As a country, we need to recognise this and maintain our existing air connections which are hanging by a thread," he told a Tourism Export Council symposium.
He said the value of the airline sector to tourism and the rest of the economy was not well understood throughout the country and he challenged the Government to outline what planning was being done to open up the border. New Zealand was languishing well behind many other countries with the volume of available airline seats.
"The challenge that we're facing in the airline sector is that New Zealand will be left behind if we make it too hard to operate here. Right now we'd be the toughest market for airlines to operate in the world," said Tighe-Umbers.
"One of the things we have to get our head around is that many people think we are in control, we can open up safe zones when we're ready, and I think we are starting to find out that this is simply not true. The rest of the world is not going to wait for us."
There are fears in tourism that the international benefits of New Zealand's relatively good record on its Covid response will be forgotten when vaccines are introduced and rival destinations open up more quickly.
Even without Covid, New Zealand was tough for many long haul carriers, said Tighe-Umbers.
"We have some of the longest flights in the world coming into what is a limited catchment area. This means we have to work doubly hard to keep those air connections."
He said that right now New Zealand had some of the most restrictive border settings in the world, which meant it had some of the most challenging route dynamics.
Although not limited to New Zealand, international airfares were likely to rise as capacity grew gradually and the economies of scale began to return.
"Airlines will be dealing with a tougher international environment and there will be an uplift in ticket [prices]. The halcyon days of really good international deals may be gone for a little while as airlines get back on their feet."
Tighe-Umbers said it was crucial that the International Air Freight Capacity scheme was extended beyond next March. The $330m scheme was making routes viable, just, for airlines and providing "a pulse" for the international aviation network.
Covid-19 Response Minister Chris Hipkins said the Government understood the impact of the pandemic on a range of industries in New Zealand, and has provided some support to them.
"New Zealand has an elimination strategy for Covid-19, which to date has been highly successful.''
There were very few other countries that are anywhere near being genuinely low risk, from a health perspective.
"Providing an effective managed isolation and quarantine system to keep New Zealanders safe remains a critical part of that approach. How we do this in future, however, could change as we are continue to learn more and as situations change overseas.''
There were real constraints on adding new facilities that have to be considered carefully.
These include the essential workforce who care for and protect returnees, and the additional resources that would be required to audit infection controls at any bespoke facilities.
"We are also looking at opportunities for quarantine-free travel on a case by case basis and we are actively doing so with Australia and the Cook Islands right now. Other options being considered include quarantine periods of different lengths, depending on risk,'' Hipkins said.
Contact tracing and testing regimes were very strong but needed to ensure the demands were balanced with other demands on the country's health system.
Barnz' plea to the Government includes:
• Safe travel zones with the Cook Islands and Australia as soon as possible - this would free up to 40 per cent of MIQ places
• A traffic light system for quarantine times matching risk - from none to 14 days depending on risk
• Consider self-isolation for arrivals from low-risk countries
• Consider private management of managed isolation in some cases
• Widespread track and trace capability
• Extend the air freight subsidy scheme well into next year
• Cut costs for airlines by subsidising services such as air traffic control