Victor Luca, mayor of Whakatāne, a town on New Zealand's North Island which is at risk of losing its only link served by Air Chathams (3C, Chatham Island), welcomed the recently announced NZD30 million New Zealand dollar (USD17.6 million) support programme offered by the national government to support regional air services, but added the authorities had "an obligation to do more." He suggested that the support could be co-funded by partially state-owned Air New Zealand (NZ, Auckland International).
In a report from the regional daily, Bay of Plenty Times, Luca said the initiative is a start, but only operators can judge whether it is sufficient.
"A subsidy of NZD1 million to Air Chathams from Air New Zealand profits would represent only 0.2% of [the airline's last annual profit]," he said, referring to Air New Zealand's USD412 million net profit in the 2022-2023 financial year.
Air Chathams announced in April that it may suspend flights between Whakatane and Auckland International by the end of the year, as it has been losing money on the route since 2023.
In May, the airline asked Whakatāne District Council for support by forgiving a NZD350,000 (USD205,000) loan, granting a 12-month waiver on airport fees, and providing new loans to acquire more aircraft. All requests were denied except for a six-month waiver on airport fees.
Potential interline agreement
Air Chathams is looking forward to the digital upgrades, part of the NZD30 million New Zealand dollar financing, which will allow passengers to book flights from regional carriers and mainline airlines in one ticket.
"We're looking to hopefully roll out a domestic trial later this year, but it's expensive, I can tell you, having gone through it. So any support that we can get for that is greatly appreciated," Air Chathams chief executive Duane Emeny told the local radio station Newstalk ZB.
Air Chathams is in talks with Air New Zealand about a potential interline partnership, the latter confirmed to local news service 1News.
The carrier said in a statement: "We'll review the details of the package when they're released and continue working with officials and regional partners on practical next steps."
Air Chathams said an interline agreement would benefit regional communities and could provide future advantages such as lounge access and frequent flyer points.
The loans, funded through the regional infrastructure fund, were announced on September 1. The programme aims to alleviate the financial burdens of small airlines like Air Chathams, Sounds Air, Barrier Air, and Originair, which are operating at a loss to sustain regional air connectivity.
