General Aviation Tourist group's plea for help as high end operators run on fumes

Louisa (Choppy) Patterson says the scenic flight sector is at risk. Photo / Supplied

Tourist flight operators hammered by the border shutdown are pleading for help from the Government to help their businesses survive.

Some operators are reliant on overseas visitors for up to 93 per cent of their business and fear they will not make it through the Covid-19 crisis to provide services for high-spending tourists when they return.

Overseas visitors spent about $100 million on flights last year.

The General Aviation Tourism group (GAT) represents about 40 businesses spread throughout the country which are seeking monthly payments to help cover fleet costs plus a monthly payment of between $20,000 to $33,000 to cover compliance costs and a continuation of the wage subsidy.

When the border opens with Australia the group wants operators to be able to tap into a $32m Government-guaranteed loan with no repayments needed for two years.
Kiwis make up about 20 per cent of passengers but typically spend just a third of overseas visitors per excursion.

Individual GAT businesses earn between $300,000 and $30m from tourism operations a year and 80 per cent of them are small, with fewer than 20 staff.

Louisa "Choppy" Patterson, a member of the group and founder of Over the Top heli tour firm in Queenstown, said up to 50 per cent of the workforce throughout the sector could be made redundant.

So far tour operators hadn't received any funding from the Government's $600m aviation package or from the $400m fund to help the tourist industry.

A spokesman for Tourism Minister Kelvin Davis said anyone in the tourist sector could apply through the Ministry of Business Innovation and Employment recovery fund aimed at helping businesses identify their future, support Maori tourism, protect iconic tourism assets and secure long-term sustainability for the sector.

Patterson said it was expensive to mothball aircraft but the biggest risk was losing experienced staff.

"We can survive by hibernating on a skeleton crew but when the borders open and the music starts, there will be no band members," she said.

"Experienced personnel will have been forced to shift to other countries to find work or shift to other vocations — safety will be compromised."

Tourism

In a submission to Parliament's Epidemic Response Committee, the group said business' contribution to growing the economy had been disproportionately above their size with a buoyant sector over the last 10 years creating high-value jobs that had average earnings 44 per cent higher than the New Zealand average.

But since the borders closed in the third week of March income had dried up and operators had to refund customers.

The operators were among the hardest hit by the shutdown and while the return of domestic travellers provided some earning potential this was tempered by prospects of a sharp recession.

A transtasman bubble would help but would be inadequate to support a sector with weighted exposure to international clientele from US, UK/Europe and China/Asia inbound tourist markets, according to a survey of members.

"With around 40 per cent of the market resuming (New Zealand domestic and Australian inbound) businesses should have a good feel for their future, albeit most respondents considered that it will be still constrained for at least three to five years.''

Patterson's own business had a slow restart over Queen's Birthday weekend after travel restrictions came off.

''Less than $2000 income from the local market, and $9500 refund for a cancellation of a flight in November from an overseas client. So here we are 10 weeks on and still operating in negative cash flow.''

The group welcomed the Business Finance Guarantee Scheme however were reluctant to take on more debt knowing that future business prospects remain extremely limited while the border was effectively closed.

It would be difficult to re-deploy aircraft as they we especially configured for the high-end tourist market.

"The agricultural sector and the deer hunting sector have different type of aircraft from those that are used for high yield low impact tourism."

The group says Government loans were essential.

''Banks understand aviation business risk well, having had exposure to the sector and a number of high-profile business failures over the years. Quite simply, even in the best of times they hang tough, and with exposure to ongoing prolonged income uncertainties, the banks say that even at 20 per cent exposure the risk to their business is too excessive for them to contemplate.''