The Crown will provide a multi-million dollar loan to Hawke's Bay Airport to ensure it can trade through the Covid-19 pandemic, a move it says will protect up to 200 jobs.
It has a 50 per cent shareholding in Hawke's Bay Airport Limited (HBAL), with Napier City Council holding 26 per cent and Hastings District Council 24 per cent.
Deputy Prime Minister Winston Peters said on Monday the airport required financial support of up to $9 million due to reduced passenger numbers and revenue caused by Covid-19 lockdowns.
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It would loan up to $4.5 million on commercial terms, with the councils providing up to a further $4.5 million, Peters said.
"It's important we retain an important regional asset which will enable Hawke's Bay to stay connected and support the recovery of the domestic tourism and aviation sectors.
"Hawke's Bay Airport experienced a significant drop in revenue due to Covid-19.
"The request was made to shareholders to provide financial support to ensure the airport remained viable and to allow completion of the terminal redevelopment, an important part of the airport expansion project, which was started before the onset of Covid-19."
HBAL chairwoman Wendie Harvey said the airport board was "highly appreciative" of the loan.
Airport chief executive Stuart Anslie said management had already taken "significant steps" to ensure the airport recovered to profitability as efficiently as possible.
Finance Minister Grant Robertson said as a major shareholder, it was appropriate for the Crown to provide a loan to support the airport.
"This ensures the terminal redevelopment can proceed, protecting up to 200 jobs, including those of contractors already working on the project.
"As a Government, we support investments that will help our regions and local economies continue their recovery and rebuild."
Hastings District Mayor Sandra Hazlehurst said the airport is "essential to our economy and recovery from Covid-19".
"The lockdown meant the Hawke's Bay Airport lost 95 per cent of its business in a matter of days and it still has its terminal expansion to complete. The airport is a strategically important asset to our economy and community, and as a shareholder, we are pleased to support them while they get back to full recovery.
"It is great we can provide the airport with the necessary financial support while at the same time not impacting the ratepayers, with the airport paying the necessary interest on it."
Napier Mayor Kirsten Wise said the airport was an asset to the community and regional economy.
"As a shareholder, it is important we are there to support the work necessary to enable our airport to meet its obligations.
"As restrictions will ease eventually, I have no doubt this business will enjoy the same financial success it has achieved in the recent past."
The loan is expected to be repaid within two years and is considered fiscally neutral.
There will be no impact on net core Crown debt over the period of the loan and the capital expenditure associated with the appropriation will not impact the Covid-19 Response and Recovery Fund.