Emirates urgently flew Covid-19 vaccines to NZ when supplies were low.
Emirates urgently flew Covid-19 vaccines to NZ when supplies were low.
Figures from the Ministry of Transport (MoT) show which airlines benefitted most from the taxpayer-funded air freight scheme, described as “one of the best pieces of policy work” delivered during the pandemic.
The $1 billion scheme was put in place within weeks of the pandemic hitting in early 2020 tohelp maintain critical cargo and passenger links to the rest of the world.
Air New Zealand was paid the bulk of the $950m divvied out to airlines which flew international routes.
It was paid just under $798 million under the Managed International Airfreight Connectivity (MIAC) scheme, according to figures released by the MoT.
The scheme was extended twice until March 2023 to continue helping to rebuild international reconnections and economic recovery.
Air New Zealand chief financial officer Richard Thomson said financial support of the scheme was vital to the airline.
“This scheme enabled flights to be operated across key arterial air freight routes that would not have otherwise been possible to operate. Other international air freight carriers also participated in this support scheme, and the Australian government operated a similar scheme to ensure freight connectivity during the pandemic,” he said.
The company last month announced its second-biggest underlying profit ($585m) in one of the biggest corporate turnarounds in New Zealand history. Asked whether it would consider repaying the MIAC funds, he said the airline was pleased to now be standing on its own two feet.
“Air New Zealand has repaid the Crown Standby Facility with interest. Air New Zealand is grateful for the support it received when it needed it. We are now focused on looking after all of our stakeholders, including shareholders of which the Government is part of.”
It paid the Government a dividend of around $100m this year.
Other international airlines to receive $18m or more from the scheme were China Southern, Taiwan-based China Airlines, Malaysia Airlines and Emirates, which delivered vaccine shipments to this country.
Among other airlines to get smaller amounts were Air Tahiti Nui, Korean Airlines, Cathay Pacific, Tasman Cargo Airlines, Parceline Express and Qantas.
Board of Airline Representatives executive director Cath O’Brien said MIAC was critical to keeping New Zealand connected to the world for cargo and passenger travel during the Covid-19 pandemic.
When borders closed, many airlines around the world completely grounded their fleets as demand for travel plunged.
With 80 per cent of the air freight to New Zealand in the belly of a passenger aircraft, the country needed to design a way to ensure crucial imports such as PPE, pharmacuticals and vaccines.
Board of Airline Representatives executive director Cath O'Brien. Photo / Dean Purcell
It was also a crucial way of getting exports to markets. The MoT estimates the schemes helped move $22.5 billion in exports and imports.
O’Brien said it helped make otherwise uneconomic passenger flights viable, even though loads were often light.
“We needed to maintain a passenger pathway to New Zealand, and to the Pacific, so New Zealanders could return home.”
A small number of passengers with MIQ vouchers were able to travel, but this small demand wasn’t enough to operate commercial services.
Without MIAC, airlines would have been unlikely to maintain scheduled services to New Zealand, she said.
Once airlines leave a market, restarting services requires significant effort and cost.
“MIAC was successful in keeping international carriers in this isolated market. MIAC was probably one of the best pieces of policy work New Zealand delivered during the pandemic,” she said.
“While it was expensive, the cost of not having such a scheme would have been far higher in terms of lost connectivity, both during the pandemic and in the recovery that followed.”
She also paid tribute to pilots and crew who operated in tough conditions to keep flights operating. They were subject to strict quarantine and isolation regimes and the risk of catching Covid-19 when little was known about the disease.
“Without the willingness of these people to serve international connectivity, airlines could not have delivered air connectivity to New Zealand and beyond.”
