Government must step up to save vital regional air routes – Simon Wallace

Sounds Air and other airlines are imperilled by rising costs, with implications for healthcare, tourism and freight, Simon Wallace says.

THE FACTS

• Airways New Zealand this week confirmed an average price increase of 17.7% across three years for commercial airlines.
• It said the change translated to an increase of 7.8% in the first year, 6.5% in the second and 2.5% in the third.
• A potential air traffic controller shortage, digital control towers and multiple price hikes for the sector have caused concern in recent months.

New Zealand’s vital regional air routes are being crippled by soaring costs as recent government levy and fee increases on aircraft operators add to an unsustainable burden.

Within weeks of the Civil Aviation Authority (CAA) ramping up its fees, levies and charges, in some cases by more than 100%, Sounds Air confirmed it will axe its Blenheim to Christchurch and Christchurch to Wānaka services.

It will also sell five aircraft to remain viable.

This follows its withdrawal of its Wellington to Taupō and Wellington to Westport routes last year.

Loss of regional air routes rips out lifelines for our communities – literally, in the case of Blenheim to Christchurch.

This is a critical healthcare link for Marlborough people needing specialist treatment such as chemotherapy, radiotherapy and day surgery in Christchurch.

As of September 28, that’s gone and they face an about four-hour drive, one way.

Regional air services are the backbone of connectivity for New Zealand, not just healthcare and holidaymakers but business, education, freight and emergency response capability.

The Kaikōura earthquake and Cyclone Gabrielle showed us just how vital these regional air routes and carriers are in times of crisis, delivering vital supplies and medical care to cut-off communities.

With extreme weather events now part of life, they are becoming even more important.

Yet our regional carriers that serve smaller centres, supplementing Air New Zealand’s domestic network, are struggling.

They face a growing burden of compliance costs across a range of government agencies that intersect with the industry.

This also includes other government charges such as ACC levies and airport landing fees.

Alongside the CAA’s hikes, government air traffic control agency Airways New Zealand this week set a 6% average annual price increase.

These hikes amount to hundreds of thousands of dollars per year for regional carriers, on top of fee increases from airports and growing operational and maintenance costs.

The assumption is that operators can pass the cost on to the passenger, but there comes a point where that’s not feasible.

This leads to route cuts, aircraft sales and staff losses and once gone, these are very difficult to bring back.

The Government says it wants to partner with the industry to “build an aviation sector that continues to be a pillar of New Zealand’s economy and a lifeline for our communities”.

Its goal is to transition the CAA into a 100% industry-funded regulatory body (it is already 90% industry-funded) and rely on market forces to lift the sector and support regional communities.

This is wrong. As with Crown funding for critical infrastructure such as rail and roading, the Government plays a role in supporting access to safe and secure air services domestically and internationally.

This is in the wider public interest and good for New Zealand.

There are at least 30 countries around the world that support regional airlines in different ways.

In Australia, the Government has made a strong commitment to support access to safe and secure regional air services with a package of measures.

This includes access to concessional loans, something that has been floated here and is part of a possible solution.

Aviation services are essential to our regional communities and New Zealanders deserve access to them now and into the future.

If the Government really wants to support regional connectivity and deliver its economic growth plan, it urgently needs to lend a helping hand to our regional carriers so they can keep these routes in the air.