Around 600 workers at Qantas' New Zealand subsidiary Jetconnect have missed out on the wage subsidy because the company does not meet the criteria for this round of applications.
Jetconnect, which employs New Zealand-based pilots and flight attendants to fly the transtasman route, previously received the wage subsidy in last year's level 4 lockdown and the subsequent August 2020 Auckland lockdown.
But the criteria for this round of the wage subsidy requires companies to declare a 40 per cent drop in revenue that is directly related to the rise in alert levels to level 3 or 4.
Jetconnect's revenue was hit before the lockdown after the Government announced it would shut the transtasman bubble on July 23 for two months. Just over three weeks later New Zealand was plunged into an alert level 4 lockdown.
A pilot at Jetconnect, who spoke on condition of anonymity, said the company appeared to have fallen through a "bureaucratic crack".
"It is fine for people like myself. I have an electrical company as well so can claim for a wage subsidy through that.
"But my young flight attendant colleagues - they are not in the best financial position."
While the workers were already on standby with no pay due to the closure of the transtasman bubble, the pilot said many had not gone looking for a secondary job in the hopes the bubble might reopen.
"We were running on the assumption, and probably in hindsight it was a pie in the sky sort of dream, that the bubble would be shut for two months."
He said there were also rumours that a bubble could open on a state-by-state basis with the Australian states that were still Covid-free.
"People didn't commit to other jobs. Then we have come to a level 4 lockdown and it is harder for people to go find secondary employment in these current circumstances."
The Herald understands Qantas and the New Zealand Government are still in talks about the support options available for its New Zealand workers.
In Australia Qantas workers in states affected by lockdowns are able to apply for the Federal Government's Covid-19 disaster support payment under the retaining domestic aviation scheme which pays out up to A$750 (NZ$776) a week.
But the support is only available to Australian-based workers.
New Zealand's wage subsidy is worth up to $600 a week for full-time workers and $359 for part-time workers. Businesses can apply for two weeks at a time if they meet the criteria.
The pilot said the lack of support would mean more people would leave the industry or go to find work overseas for the likes of Emirates, which was still hiring, or in freighting services.
"Worst case these jobs will go to Australia. If people want a viable competitor to Air New Zealand on the Tasman they need to support these workers."
Air New Zealand, which is 52 per cent owned by the New Zealand Government, has received the latest round of the wage subsidy receiving a payout of $8.59 million for its 7218 workers.
Air New Zealand operates domestically as well as internationally and has a freighting arm while Jetconnect only operates the transtasman service.
The Herald asked for comment from Finance Minister Grant Robertson, Social Development Minister Carmel Sepuloni and Transport Minister Michael Wood on the Jetconnect situation but only Wood replied.
In a statement Wood said the Government had made a significant investment in ensuring New Zealand retains aviation capacity through the Maintaining International Air Capacity scheme.
"Under that scheme, international airlines are supported to continue to operate to New Zealand, maintaining critical freight and passenger connections including ensuring that our high-value airfreight exports can still reach their destinations. Currently the scheme supports nine airlines operating around 60 international flights per week."
A spokeswoman for the Ministry of Social Development said it did not have any record of an application under the name Jetconnect for the current or previous Covid-19 Wage Subsidy in August 2021, nor any record of an application having been declined.
Jetconnect was unable to submit an application because it required a declaration stating that the airline was eligible against the published criteria which it was not.