Overseas pilot training was a big earner before the pandemic. Photo / International Aviation Academy of New Zealand
An aviation group says New Zealand’s lucrative international pilot training is struggling to recover since the pandemic, losing nearly two-thirds of its value due to Covid-19.
Research commissioned by the Aviation Industry Association of New Zealand (AIANZ) showed at its peak in 2019 the industry was contributing $86 million in gross domestic product (GDP), with 652 international students enrolled and growing strongly.
But Covid-19 and the exit of a major international pilot training school resulted in this plummeting between 2020 and 2021 to a low of just 173 students in 2022.
The latest figures for 2023 remain low with 186 students and a contribution to GDP of $30.7m, according to the study by independent research group Scarlatti.
Association chief executive Simon Wallace said like many other parts of New Zealand’s international education sector, pilot training was still recovering.
“At its pre-Covid peak, this sector was showing high demand from international students looking for high quality pilot training and appeared to be growing. Without the sudden shocks imposed by Covid-19, the value today may have been even larger.”
He said visa processing times were deterring some potential recruits.
Despite some improvement, students faced delays of up to a month compared to processing times as short as around a week in Australia.
Immigration Minister Erica Stanford’s office referred Herald inquiries to the Ministry of Business Innovation and Employment, which said processing of student visas was a “priority” for Immigration New Zealand (INZ) and the average time was three weeks.
“We receive the highest volume of student visa applications between October to March,” MBIE’S Celia Coombes said.
“Applications take longer to be decided during this peak period, so it is important that anyone who is wanting to come to New Zealand to study in 2025 applies early,” Coombes added.
The association’s research found international students paid an average of $120,000 in fees for a two-year course of study and contributed another $22,500 per year in living costs including food and accommodation, and $5800 in tourism and associated activities.
Flight training schools also play a significant role in regional economies, with Waikato, Otago, Auckland, Canterbury and Manawatū-Whanganui accounting for 95% of GDP from the sector, and Nelson/Tasman and Southland the remaining 5%, the research found.
Between 2010-2020, providers in the Waikato contributed approximately $33m.
However, this declined dramatically in 2021 due to the relocation of L3 Harris Airline Academy back to the United States.
When it announced its closure in 2020, L3 said it was making the move because of “complex issues” related to Covid-19. About 170 staff lost their jobs.
According to the research, a new provider in Otago has been making an increasing contribution to GDP - rising from around $12m in 2019 to close to $15m in 2023.
Manawatū-Whanganui had a 12% increase in its GDP contribution in this sector over the same period.
The current overall low demand among international student numbers is coming at a time when the aviation industry is facing severe pilot shortages, and in particular flight instructors.
Research for the association by Scarlatti forecast New Zealand would face a shortage of 100 pilots a year for at least the next decade.
The research found the need for pilots would only grow if there were no changes made to New Zealand’s tertiary policies which cap student loan borrowing for domestic students $35,000 a year.
That was set in 2013 but training costs had increased to $120,000 for a two-year course.
Wallace said the situation would worsen without government intervention to address tertiary policy settings, in particular the student loan cap locking many young New Zealanders out of a career as a pilot.
Increasing numbers of international students studying pilot training could help address this shortage in several ways, he said.
“A change in immigration policy settings to allow these international students to work in New Zealand as flight instructors for a period following their studies would help alleviate the flight instructor workforce gap.
“As well as helping stimulate economic growth in the regions, having more international students would also strengthen the capacity and capabilities of flying schools across the country, enhancing the overall experience of pilot training for both domestic and international students.”
The top five markets are currently India, Australia, Vietnam, Japan and the United Kingdom.
“New Zealand’s international pilot training industry is highly regarded globally.”
Airlines – anticipating a pilot shortage – have also returned to training their own staff and there was fierce competition from flight schools in other countries.
But Wallace said New Zealand was still attractive.
“Our open skies, demanding terrain and weather patterns that challenge students make us an extremely attractive proposition for international students as well as high-value training arrangements with major intentional airlines,” he said.
“With the right policy settings, international students will return.”
MBIE’s Coombes said students should apply at least three months before their intended travel date to give them the best chance of having their application decided in time.
Students can apply earlier than three months ahead of intended travel, if they have the information required to submit their application.
She said during the last peak processing period there had been extensive engagement with the Aviation Industry Association.
Between January 1 and October 23 this year there were 140 applications from students intending to studying aviation at a standalone aviation provider, of which 95% were approved.
The average processing time for these applications was 15 weekdays, or three weeks.
Approximately 41% of the applications were processed within two weeks, she said.
Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.
Legal action by PSA means some changes are currently on hold.
