The New Zealand government has announced a loan package of up to NZD30 million New Zealand dollars (USD17.6 million) for at-risk regional airlines, but the support has come too late for Sounds Air (S8, Picton), which has already sold aircraft and made staff redundant.

The government announced on September 1 that the funding will be administered by the regional development unit Kānoa and will take the form of concessionary loans from the regional infrastructure fund. The loans are intended to provide short-term relief to smaller carriers for leasing, maintenance, and debt refinancing amid rising costs and post-pandemic disruptions.

The move was met with a deflated response from Sounds Air’s managing director, Andrew Crawford, who told local outlet Crux News that it was “too late.”

“We were talking to the government for six years and nothing happened,” he added. He stressed that the airline had already been forced to cancel routes, including services from Wanaka.

Crawford separately told local newspaper The Post that it had previously applied to the infrastructure fund with no success. This was to have been used to procure another Cessna C208 Caravan to boost its fleet to five. He said the government had decided Sounds Air did not meet its requirements.

In July 2025, Sounds Air disclosed plans to withdraw from the Christchurch-Blenheim and Christchurch-Wānaka routes at the end of September and sell its fleet of six Pilatus PC-12s due to cost pressures and unfavourable exchange rates. At that time, Crawford confirmed ten redundancies and said the airline would focus on Cook Strait operations with its fleet of Cessna C208 Caravans, according to ch-aviation reporting.

Regional development minister Shane Jones said government support is needed as small regional carriers face rising costs, limited capital, and post-COVID disruptions. Without intervention, communities risk losing vital air links, and recovery is difficult and costly once fleet capacity is lost, he said.

The New Zealand Airports Association (NZAA), which worked with Air Chathams, Sounds Air, Barrier Air, and Originair to push for the support, welcomed the move. Chief executive Billie Moore said rising costs and tougher financing have made selling aircraft overseas more attractive than maintaining domestic services. She added that some routes have already been lost, and the priority now is stabilising and growing connectivity.

Alongside the loans, the government approved funding for digital upgrades to facilitate interlining between regional and major carriers. Associate transport minister James Meager said this would simplify bookings and baggage handling, which will allow passengers to complete multi-airline itineraries more easily.

ch-aviation has reached out to Sounds Air for comment.