Some Air New Zealand crew members arriving back in New Zealand are isolating at Auckland's Hotel Grand Windsor, with taxpayers footing the bill.
But the arrangement is "currently under review", according to a managed isolation and quarantine spokesperson.
New Zealand-based aircrew arriving into the country from "higher risk" Covid-19 destinations as part of their work duties are required to enter 48 hours' self-isolation at a hotel. They must return a negative test before they can leave isolation.
Prior to this rule coming into force three weeks ago, aircrew had the choice to self-isolate at home in New Zealand.
The hotel used is separate from the MIQ hotel facilities used by the general public and it is not managed by MIQ.
San Francisco and Los Angeles are currently classed as "higher risk" routes, while deaths from Covid-19 in the US exceed 450,000.
Around 70 pilots and 18 cabin crew return each week from these destinations, an Air New Zealand spokeswoman said.
The managed isolation and quarantine spokesperson said self-isolation hotels differ from managed isolation facilities but are still required to meet a number of criteria.
"MBIE and the Ministry of Health provided advice to Air New Zealand over its selection of a self-isolation hotel so it could meet new guidance for New Zealand-based aircrew returning from high-risk destinations.
"This guidance was developed in response to the changing situation internationally with Covid-19 and with the goal of keeping New Zealand safe from the virus top of mind."
Air New Zealand began using this facility on February 5 as its previous hotel couldn't accommodate the number of crew required to isolate under new health guidelines.
"Currently the cost of accommodation for Air New Zealand aircrew that enter hotel self- isolation is paid for by MBIE. This arrangement is currently under review."
Air New Zealand chief operating officer Carrie Hurihanganui said there are limited options available that meet the Ministry of Health requirements and the airline's employee collective contractual agreements or requirements.
"The Grand Windsor was selected and approved of meeting the combined needs list for crew to isolate after returning from high-risk destination," she said.
"It just started up for pilots on February 5 and cabin crew transitioned from the previous hotel to this one from ... the 8th. It's relatively new just this past weekend."
Meanwhile, changes have been made after it was revealed by Newshub that Air New Zealand crew were able to leave an isolation hotel to exercise on the streets of Auckland's CBD for almost three weeks.
The guidance given to crew has since been clarified, with the crew advised to stay inside and spare rooms at the Grand Windsor being transformed into gyms.