The Government's offering up to 30-million dollars in loans from the Regional Infrastructure Fund to smaller airlines.
It's also approved funding for a digital development that will allow regional transport bookings to be integrated with the platforms of major carriers.
Associate Transport Minister James Meager says most regional airlines couldn't opt to charge more as a solution to tough times.
New Zealand Airports Association Chief Executive Billy Moore says this is a ‘smart strategy’ from the government to improve regional airlines.
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Speaker 1 (00:06):
You're listening to the Carrywood and Mornings podcast from News Talks.
Speaker 2 (00:10):
He'd be as we were talking. The government's offering up
to thirty million dollars in loans from the Regional Infrastructure
Fund too smaller airlines. It's also approved funding for a
digital development that will allow regional transport bookings to be
integrated with the platforms of major carriers. Associate Transport Minister
(00:30):
James Mega told Mike Cosking most regional airlines couldn't opt
to charge more as a solution to tough times, as
he says, if they push prices too high, people will
make the decision to travel regionally by road. New Zealand
Airport's Association Chief Executive Billy Moore joins me, now, very
good morning to you once again.
Speaker 3 (00:50):
Good morning.
Speaker 2 (00:51):
Loans have to be paid back. Is that going to
be a problem?
Speaker 3 (00:55):
Look, I don't think so. We've been working with the
major regional airlines for about twelve months to analyze the
issues and figure out what the best interventions might be
and this is where we came out too. So the
government has come up with an approach that aligns with
our thinking. The reason why loans make sense is that
(01:16):
these operators need some more liquidity to deal with rise
and costs. They've got very valuable assets in the aircraft
and the key problem is that it makes better business
sense for them to sell the aircraft than keep them
running at the moment. So the loans will help to
balance that equation in the favor of keeping those regional
routes going.
Speaker 2 (01:36):
What's going to magically change. We're all suffering from the
cost of living crisis.
Speaker 3 (01:42):
Oh, look, absolutely. I think the special aspect to all
this is these are extremely dedicated operators. They wouldn't be
in the airline business if they weren't. It's pretty low margin,
very difficult to scale for these regional airlines there on
the margins of the network which is dominated by the
national carrier. So they want to keep going. They want
to keep providing services to the regions, and this will
(02:05):
give them a platform to try and keep that going,
hopefully get to more of a gross orientation. So it's
certainly not going to fix everything, but it is a
welcome support and it is something new for the government
to get into. You know, most other countries do have
some kind of support for these type of carriers, So
(02:25):
I think it's an important step hasn't been done rashly.
It's very thoughtful I think from the ministers, and you know,
these guys have have done it tough for a long time,
so I think I think it's a smart strategy at
this point.
Speaker 2 (02:40):
Yeah, I know, I must be so frustrating when you
can see that things are going to get better, but
you're not sure if you're going to have the omph
to get you over the finish line or you know,
to get you to the starting line again.
Speaker 3 (02:54):
Really yeah, it's a good way of putting it around,
you know, giving them a little bit bit of omph
and and you know, for many of the listeners who
might have been affected by losses already, that's not going
to completely solve that problem, but we hope it will
stabilize the network and keep some of the regional links
that are still operating in place. There's also a key
(03:17):
aspect of this around growth and trying to create new
opportunities in the system for regional connectivity. So we've talked
about the interline opportunities as well. The government has highlighted
this as a potential area for funding too, and this
is a great opportunity for some smaller operators where with
the right digital infrastructure baggage systems, if they can link
(03:39):
their network with larger airlines, that will improve their stability
and ability to scale in the market as well. And
for Keywi's they'll see a real difference there if we
can land that kind of idea.
Speaker 2 (03:49):
Yeah, I mean that makes a lot of sense, doesn't it.
That integration, it really does. It's not right for all airlines,
but for instance, ear Chattams has been in discussions with
their New Zealand for a long time around this, so
we hope this will give again that to get a
partnership like that over the line, which for people, for
(04:09):
instance in the Chathams and other parts of your Chatnams
network being able to book a ticket right through to
London is a pretty big game changer so and would
certainly help that airline continue to do well in the future.
So a bit of stability from this and hopefully some
of these new ideas coming in that keep this really
(04:30):
important part of our system thriving over time. How important
is it is it important? I imagine for the Chathams
they need to get their crayfish or their power they
come wanted to market as soon as possible. Is it
important for exporters. Is it important for community connection?
Speaker 3 (04:50):
Well, if you think about it, these links keep towns
on the map. The ability to fly in to these
places allows them to be part of dynamic economy. It's
important for aero medical service people going to hospital from
Westport into Wellington, for instance. There are lots of hidden
(05:14):
needs that these communities have that are met by aviation
emergency services as well the ability for government agencies to
get around there are really important services as well as
the ability for economies to be a bit more dynamic
in the regions. The challenges of not being on the
(05:34):
aviation map it can be quite insidious for these regional
economies over time. So that's why we are always so
focused on this because these routes have such an important
flow on effect for things like tourism, spend and the
ability for people to simply move around and have more
dynamic life.
Speaker 2 (05:55):
Do people have to use it or lose it when
it comes to their regional airline.
Speaker 3 (06:00):
Look a great point. The number one thing people can
do is to fly and actually look at these operators.
Many kiwis might have never traveled on these regional operators before.
You might have stuck to the larger carriers take a
look at their services and support them. I think once
you start, you'll be hooked. And I figure there is
(06:22):
a real usable there's aspect demand is still very healthy
out there. It's that those supply chain issues and aircraft
shortages that have really affected these guys. But the more
kiwis who can take a look at these services, think
of new places to go that are off the main
trunk lines. We'd love to see that.
Speaker 2 (06:43):
Thank you so much. Always good to chat Billy. And
do you think the fact that it's alone means that
those the airlines that are sustainable will take them and
use them. Those that are unsustainable have gone under already.
Speaker 3 (06:58):
Look, I think there's a there is an aspect to
that where there's a natural market process there. But I
think the operators that are in place now will do
their best to put forward proposals to the government now
how best to use this opportunity, whether that's things like
debt refinancing or for others, whether it might include things
(07:20):
like procurement of additional aircraft over time. So yeah, I
think there has been preps and natural consolidation in the market.
But what's really important for these regional airlines is that
they all operate in different parts of the country. They
all provide distinct services to specific regional communities, and it
(07:41):
would be a lot more expensive to try and rebuild
those services from scratch then keep them going in the
way that they are now.
Speaker 2 (07:47):
Thanks so much, Billy. Good to Talk News Talks, that
is Billy Moore, Chief Executive the New Zealand Airports Association.
Speaker 1 (07:55):
For more from Kerry Wood and Mornings, listen live to
News Talks that Be from nine am weekdays, or follow
the podcast on iHeartRadio.
You're listening to the Carrywood and Mornings podcast from News Talks.
Speaker 2 (00:10):
He'd be as we were talking. The government's offering up
to thirty million dollars in loans from the Regional Infrastructure
Fund too smaller airlines. It's also approved funding for a
digital development that will allow regional transport bookings to be
integrated with the platforms of major carriers. Associate Transport Minister
(00:30):
James Mega told Mike Cosking most regional airlines couldn't opt
to charge more as a solution to tough times, as
he says, if they push prices too high, people will
make the decision to travel regionally by road. New Zealand
Airport's Association Chief Executive Billy Moore joins me, now, very
good morning to you once again.
Speaker 3 (00:50):
Good morning.
Speaker 2 (00:51):
Loans have to be paid back. Is that going to
be a problem?
Speaker 3 (00:55):
Look, I don't think so. We've been working with the
major regional airlines for about twelve months to analyze the
issues and figure out what the best interventions might be
and this is where we came out too. So the
government has come up with an approach that aligns with
our thinking. The reason why loans make sense is that
(01:16):
these operators need some more liquidity to deal with rise
and costs. They've got very valuable assets in the aircraft
and the key problem is that it makes better business
sense for them to sell the aircraft than keep them
running at the moment. So the loans will help to
balance that equation in the favor of keeping those regional
routes going.
Speaker 2 (01:36):
What's going to magically change. We're all suffering from the
cost of living crisis.
Speaker 3 (01:42):
Oh, look, absolutely. I think the special aspect to all
this is these are extremely dedicated operators. They wouldn't be
in the airline business if they weren't. It's pretty low margin,
very difficult to scale for these regional airlines there on
the margins of the network which is dominated by the
national carrier. So they want to keep going. They want
to keep providing services to the regions, and this will
(02:05):
give them a platform to try and keep that going,
hopefully get to more of a gross orientation. So it's
certainly not going to fix everything, but it is a
welcome support and it is something new for the government
to get into. You know, most other countries do have
some kind of support for these type of carriers, So
(02:25):
I think it's an important step hasn't been done rashly.
It's very thoughtful I think from the ministers, and you know,
these guys have have done it tough for a long time,
so I think I think it's a smart strategy at
this point.
Speaker 2 (02:40):
Yeah, I know, I must be so frustrating when you
can see that things are going to get better, but
you're not sure if you're going to have the omph
to get you over the finish line or you know,
to get you to the starting line again.
Speaker 3 (02:54):
Really yeah, it's a good way of putting it around,
you know, giving them a little bit bit of omph
and and you know, for many of the listeners who
might have been affected by losses already, that's not going
to completely solve that problem, but we hope it will
stabilize the network and keep some of the regional links
that are still operating in place. There's also a key
(03:17):
aspect of this around growth and trying to create new
opportunities in the system for regional connectivity. So we've talked
about the interline opportunities as well. The government has highlighted
this as a potential area for funding too, and this
is a great opportunity for some smaller operators where with
the right digital infrastructure baggage systems, if they can link
(03:39):
their network with larger airlines, that will improve their stability
and ability to scale in the market as well. And
for Keywi's they'll see a real difference there if we
can land that kind of idea.
Speaker 2 (03:49):
Yeah, I mean that makes a lot of sense, doesn't it.
That integration, it really does. It's not right for all airlines,
but for instance, ear Chattams has been in discussions with
their New Zealand for a long time around this, so
we hope this will give again that to get a
partnership like that over the line, which for people, for
(04:09):
instance in the Chathams and other parts of your Chatnams
network being able to book a ticket right through to
London is a pretty big game changer so and would
certainly help that airline continue to do well in the future.
So a bit of stability from this and hopefully some
of these new ideas coming in that keep this really
(04:30):
important part of our system thriving over time. How important
is it is it important? I imagine for the Chathams
they need to get their crayfish or their power they
come wanted to market as soon as possible. Is it
important for exporters. Is it important for community connection?
Speaker 3 (04:50):
Well, if you think about it, these links keep towns
on the map. The ability to fly in to these
places allows them to be part of dynamic economy. It's
important for aero medical service people going to hospital from
Westport into Wellington, for instance. There are lots of hidden
(05:14):
needs that these communities have that are met by aviation
emergency services as well the ability for government agencies to
get around there are really important services as well as
the ability for economies to be a bit more dynamic
in the regions. The challenges of not being on the
(05:34):
aviation map it can be quite insidious for these regional
economies over time. So that's why we are always so
focused on this because these routes have such an important
flow on effect for things like tourism, spend and the
ability for people to simply move around and have more
dynamic life.
Speaker 2 (05:55):
Do people have to use it or lose it when
it comes to their regional airline.
Speaker 3 (06:00):
Look a great point. The number one thing people can
do is to fly and actually look at these operators.
Many kiwis might have never traveled on these regional operators before.
You might have stuck to the larger carriers take a
look at their services and support them. I think once
you start, you'll be hooked. And I figure there is
(06:22):
a real usable there's aspect demand is still very healthy
out there. It's that those supply chain issues and aircraft
shortages that have really affected these guys. But the more
kiwis who can take a look at these services, think
of new places to go that are off the main
trunk lines. We'd love to see that.
Speaker 2 (06:43):
Thank you so much. Always good to chat Billy. And
do you think the fact that it's alone means that
those the airlines that are sustainable will take them and
use them. Those that are unsustainable have gone under already.
Speaker 3 (06:58):
Look, I think there's a there is an aspect to
that where there's a natural market process there. But I
think the operators that are in place now will do
their best to put forward proposals to the government now
how best to use this opportunity, whether that's things like
debt refinancing or for others, whether it might include things
(07:20):
like procurement of additional aircraft over time. So yeah, I
think there has been preps and natural consolidation in the market.
But what's really important for these regional airlines is that
they all operate in different parts of the country. They
all provide distinct services to specific regional communities, and it
(07:41):
would be a lot more expensive to try and rebuild
those services from scratch then keep them going in the
way that they are now.
Speaker 2 (07:47):
Thanks so much, Billy. Good to Talk News Talks, that
is Billy Moore, Chief Executive the New Zealand Airports Association.
Speaker 1 (07:55):
For more from Kerry Wood and Mornings, listen live to
News Talks that Be from nine am weekdays, or follow
the podcast on iHeartRadio.
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