James Meager: Associate Transport Minister on government handouts to smaller airlines.

A game-changer for smaller airlines that don't want to up prices, amid soaring aviation costs.

The Government's offering up to 30-million dollars in loans from the Regional Infrastructure Fund. 

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 told Mike Hosking most regional airlines couldn't opt to charge more,  as a solution to tough times.

He says if they push prices too high, people will make the decision to travel regionally by road. 

LISTEN ABOVE

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
It terms out. We do have a program of sorts

(00:01):
to help regional air travel. Up to thirty million dollars
in loans is what we're dealing with. This comes to
us from the Regional Infrastructure Fund. It's for small passenger airlines.
James Meagher is the Associate Minister of Transporting, is behind
and he's with us.

Speaker 2 (00:12):
Good morning morning mate.

Speaker 1 (00:14):
Are you regionally as savior?

Speaker 2 (00:17):
I wouldn't call myself a savior, but the government has
done or taken some steps to support regional connectivity interlining.
What is it? So it's complicated to explain, but simply,
when you go overseas, you will book a flight and
it'll get you from A to B and you might
fly multiple airlines in that ticket. You can't do that domestically.
So we're going to introduce that system here. So if

(00:37):
you're flying from say we Sport to Auckland, you can
fly We're Sport to well into Wellington to Auckland, different airlines,
one process, make it easy for you.

Speaker 1 (00:44):
Right. Is that really the problem that regional air is
facing in this country? Is it really just getting to
Westport to Auckland in a way that you can afford
in the airlines is not going to get busted.

Speaker 2 (00:53):
No, that's not a significant problem. That's going to assist consumers,
I think, make it easier for them to travel. The
main problem is that really the costs on airlines in
the aviation sector are significant the moment, and they're doing it tough.
So we are trying to come up with ways to
help support that, and the announcement around some of the
consistory loans is one of those.

Speaker 1 (01:11):
The only thing I can think that's a value in
a loan is you can see better days therefore, or
if I can get some you know, get a bit
liquid between now and then. Is that what you're trying
to argue is going on here?

Speaker 2 (01:23):
I think you've hit the nail on the head. The
underlying solution to all of this is going to be
to continue to grow passaging numbers back to where they
were pre COVID, so we're only at about ninety percent
of pre COVID. You grow the market, grow the numbers.
That's going to provide the income to get these guys going.
If we can buy ourselves a bit of time as
those passage and numbers come back, whether that's from overseas
or domestically, that'll get us there.

Speaker 1 (01:42):
Are they having trouble with their banks at the moment?
Is that why you need to step in?

Speaker 2 (01:47):
Different airlines are having different challenges. Some of them are
carrying a bit of debt, and of course that debt
comes at a significant refinancing costs, and that means that
when they're looking at their balance sheets and how they're
actually going to be able to make a profit and
run a business, I have to sell some of their
assets and that reduces some of the routes they can fly.
So that will be some of the assistants. Others are
just looking for opportunities to actually fly those routes and

(02:08):
give them some certainty.

Speaker 1 (02:09):
Why can't see I can't remember the note. I might
have been sounds anyway, I can't remember. The point was
they were saying, look, we've got demand. The demand is there,
but we can't make money. I can't work out why
they don't charge more.

Speaker 2 (02:19):
Are you?

Speaker 1 (02:19):
Are you confident these people are running their business as well?

Speaker 2 (02:23):
I think on the whole, I think one of the
reasons they can't charge more in some instances is that
the alternative is surface travel. And when the alternative surface travel,
and you've got a family of for making a decision
of whether they can fly regionally or not. If you
push the prices too high, they're going to make that
decision to travel by the road, so they are limited
by the markers to what they can charge.

Speaker 1 (02:42):
Is this your best foot forward? This is what the
government can do and is prepared to do. But that
is it.

Speaker 2 (02:48):
It's our first step. We've got a range of other
actions and train as well, whether that's looking at workforce development.
You know we've got a shortage of engineers and pilots,
so can we make it easier to train and retain
those staff. Here we're looking at things like what are
we doing with government costs on the sector. Some of
our own fees have gone up post COVID, so what
can we do to work those down as well? And
there's a range of things we can do. But consistory

(03:10):
lines is part of it.

Speaker 1 (03:11):
Are you hopeful?

Speaker 2 (03:13):
I am hopeful. I think there's a lot of promise
out there. The rest of the world is back to
passenger numbers where they were pre COVID. We can get
there too. What I think it demonstrates is that when
things get turned off in New Zealand, it's harder and
longer to get them turned back on. So international and
domestic travel is one of those examples. We can get there,
We just need to give a bit of time.

Speaker 1 (03:31):
Well I hope so appreciate it. James Mega, Associate to
Minister of Transport. For more from The mic Asking Breakfast,
listen live to news talks that'd be from six am weekdays,
or follow the podcast on iHeartRadio.