
The headwinds facing regional airlines
'Passenger numbers are through the roof,' says Sounds Air boss Andrew Crawford.
But it has had to 'kill off' Taupō and Westport routes and sell an aircraft, and the company is still losing money.
'I wouldn't know one airline that isn't,' he says, citing fuel, labour and maintenance as the three big costs of flying.
Andrew Crawford, Sounds Air managing director. Photo: Sounds Air
Add in landing fees, Airways fees and the Civil Aviation Authority more than doubling the passenger service levy.
'This is a critical issue for New Zealand,' says Crawford. 'Between us we're flying around 600 flights a week around regional New Zealand. We don't do that for fun, that's essential services, and I can tell you that a big part of it is healthcare.'
Unless something drastic happens Crawford says he can't guarantee the security of other Sounds Air routes.
He's not the only one. Air Chathams has dropped Norfolk Island, and its Auckland-Whakatāne service is up in the air.
Chief operating officer Duane Emeny tells The Detail that flying is a high-risk business and conditions are the toughest they've been in his airline's 41-year history.
'You're one bad day from maybe having to pull an engine off an aircraft and send it away because you had a bird strike.'
He says his father Craig Emeny, founder and chief executive, has taken the airline through the global financial crisis in the early 2000s, intense competition and even a grounding by the CAA and survived.
'He's had some real challenges in his life and this seems to be trumping a lot of them at the moment,' he says.
Both airline bosses say they have had meetings with government ministers about support for the sector but Crawford says after six years he's given up.
'For six years we've been fighting to try and get support, try and get regional aviation in this country recognised and it just falls on deaf ears,' Crawford says.
His airline is 'hanging off shareholders' mortgages' but no one is listening.
Taupō mayor David Trewavas has a brand new $9 million airport terminal built with a Provincial Growth Fund grant but he can't find another airline willing to take over the Wellington-Taupō route after Sounds Air then Origin Air pulled out.
Origin Air lasted no more than six weeks before deciding the service wasn't viable.
Trewavas says his council could not have done any more to keep either airline.
'They were looking for a direct investment in the company and I don't think it's the council's business to be a part owner of an aviation company,' he says.
But finding a replacement is not easy. Air New Zealand had looked at the route but doesn't have an aircraft available and Air Chathams is only a 'possibility'.
'There's not too many second-tier airlines in New Zealand,' he says.
Duane Emeny, chief operating officer of Air Chathams. Photo: Sharon Brettkelly
Air Chathams' Duane Emeny says the most important step for the Government would be to give airlines access to low or no-interest government concessionary loans.
'To be really clear, it is a loan, so it is money that those airlines would absolutely be paying back,' he says.
But there's no definite response from the Government.
In an email to The Detail the associate transport minister James Meager says the Government is currently considering a range of options to support regional connectivity and improve competition in the sector but is yet to make any decisions, including on whether access to concessionary loans would be the right thing to do.
'We are committed to supporting existing measures to improve consumer experience flying, such as improving airline on-time performance through regular reporting, technology investments to speed up security queues, and infrastructure investments in our regional airports.
'The Commerce Commission is looking at competition in airports, and I am considering whether there is any benefit in further moves around airfare transparency and further scrutiny on how to reduce the wider costs facing the aviation sector.'
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Otago Daily Times
19 hours ago
- Otago Daily Times
Regional flights: 'Everywhere you look, costs are increasing'
Regional aviation will become increasingly unsustainable and ticket prices will continue to rise until the government takes action on aviation system costs, airlines say. Sounds Air announced this week that it will be cutting its Blenheim to Christchurch and Christchurch to Wanaka routes due to spiralling costs. End of Sounds Air route raises concerns Sounds Air chief executive Andrew Crawfords has cited rising levies as a contributing factor to the cuts, even though there is still demand on those routes. "Where are we supposed to get that from? We've just got to pull that on the travelling public." More services will be lost if there is not a reset of the investment structure of our air industry, says the Board of Airline Representatives. Executive director Cath O'Brien told RNZ the news that Sounds was cutting operations was not surprising. "We have seen substantial increases in aviation costs in New Zealand over the last year or so and really there is nowhere else to go for airlines." O'Brien said the country needed to take a responsible look at all of the costs that were currently being levied on the aviation system. "Civil Aviation levies are up, Airways costs have risen by 21 percent potentially, Auckland Airport prices for regional airlines increased by 60 percent between 2023 and 2024 "So everywhere you look, costs are increasing for airlines." She said those costs were "absolutely" being passed on to customers. "So we need to have a look at airport charges, we need to have a look at the Civil Aviation levies, and say how much should these charges be allowed to increase altogether over time. "Because at the moment, all of these individual charges increase one by one all of the time, so every single one airport will increase its charges, the CAA will, Airways will, Customs will. So the effect of all that is that airlines will constantly increase prices over time." She said regional aviation was becoming commercially unsustainable and it was a real challenge for New Zealand as a whole. "The thing is with New Zealand is our aviation system is user pays, so all parts of the system are funded by airlines and their customers, so CAA levies, Customs, biosecurity, air traffic control, airport charges, all of that is funded by airlines. And in other countries that's not the case, but in this country that's where we are." In a statement, the Civil Aviation Authority said it was "acutely aware" of the financial pressures smaller operators are facing. It said the new safety levies came into effect on July 1 and were the first adjustment since 2017. "The domestic safety levy has gone from $1.60 per passenger, to $3.92 per passenger, excluding GST. "The CAA works to ensure the travelling public are safe when they fly, and like all government agencies, is also working to ensure that it delivers value for money to the travelling public and the sector to maximum extent practically possible."

RNZ News
a day ago
- RNZ News
The price of flying: 'Everywhere you look, costs are increasing'
Costs are increasing for airlines from a variety of sources, with the burden largely passed on to their passengers. Photo: Mongkol Chuewong Regional aviation will become increasingly unsustainable and ticket prices will continue to rise until the government takes action on aviation system costs, say airlines. Sounds Air announced this week that it will be cutting its Blenheim to Christchurch and Christchurch to Wanaka routes due to spiralling costs. Sounds Air chief executive Andrew Crawfords has cited rising levies as a contributing factor to the cuts, even though there is still demand on those routes. "Where are we supposed to get that from? We've just got to pull that on the travelling public." More services will be lost if there is not a reset of the investment structure of our air industry, says the Board of Airline Representatives. Executive director Cath O'Brien told RNZ the news that Sounds was cutting operations was not surprising. "We have seen substantial increases in aviation costs in New Zealand over the last year or so and really there is nowhere else to go for airlines." O'Brien said the country needed to take a responsible look at all of the costs that were currently being levied on the aviation system. "Civil Aviation levies are up, Airways costs have risen by 21 percent potentially, Auckland Airport prices for regional airlines increased by 60 percent between 2023 and 2024 "So everywhere you look, costs are increasing for airlines." She said those costs were "absolutely" being passed on to customers. "So we need to have a look at airport charges, we need to have a look at the Civil Aviation levies, and say how much should these charges be allowed to increase altogether over time. "Because at the moment, all of these individual charges increase one by one all of the time, so every single one airport will increase its charges, the CAA will, Airways will, Customs will. So the effect of all that is that airlines will constantly increase prices over time." She said regional aviation was becoming commercially unsustainable and it was a real challenge for New Zealand as a whole. "The thing is with New Zealand is our aviation system is user pays, so all parts of the system are funded by airlines and their customers, so CAA levies, Customs, biosecurity, air traffic control, airport charges, all of that is funded by airlines. And in other countries that's not the case, but in this country that's where we are." In a statement, the Civil Aviation Authority said it was "acutely aware" of the financial pressures smaller operators are facing. It said the new safety levies came into effect on 1 July and were the first adjustment since 2017. "The domestic safety levy has gone from $1.60 per passenger, to $3.92 per passenger, excluding GST. "The CAA works to ensure the travelling public are safe when they fly, and like all government agencies, is also working to ensure that it delivers value for money to the travelling public and the sector to maximum extent practically possible." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.


Scoop
a day ago
- Scoop
Marlborough Mayor ‘Disappointed' By Sounds Air Cuts
Marlborough mayor Nadine Taylor says the loss of some critical Sounds Air routes and reduction of its fleet is a sad day for the region. Sounds Air announced on Monday they would be selling their fleet of Pilatus PC12 aircraft and axing their Blenheim to Christchurch and Christchurch to Wānaka routes from September 28. Ten staff would be made redundant. Sounds Air managing director Andrew Crawford said he was devastated, but the company could not contend with mounting costs and a weak New Zealand dollar. 'It will mean the loss of a number of our dedicated and skilled staff, but we are also hugely disappointed for our incredibly loyal customer base who rely on us to get around New Zealand not only for tourism and leisure purposes but also for regional access to critical healthcare and higher education, and to do business that contributes to New Zealand's regional economies,' Crawford said. Taylor said that Marlborough Airport, a subsidiary of the Marlborough District Council, had been working with the airline to navigate through challenging times. 'It is disappointing and sad for Marlborough to lose the Blenheim to Christchurch route. This service was particularly important as it provided a vital air link for Marlborough people to get to specialist treatment in Christchurch,' Taylor said. 'There is no other option to fly direct from Blenheim to Christchurch – this is now a four-hour drive. 'That is going to put additional pressure and stress on those who are already at their most vulnerable.' Taylor said she was frustrated that Sounds Air did not receive any government support, given the company contributed to regional connectivity, tourism, and economic growth. 'There is often talk of the regions being our country's powerhouses to be that, we need infrastructure, services, and connectivity,' Taylor said. 'If regions are to grow in the manner central Government wants, investment in this space is warranted and indeed necessary.' Destination Marlborough general manager Tracey Green said the loss of a direct connection to Christchurch was a 'significant blow'. 'Recent challenges with Air New Zealand and ferry services have compromised our connectivity,' Green said. 'These are tough economic times for everyone and Sounds Air has been a strong strategic partner for Marlborough, connecting our region with two of our main domestic markets, Christchurch and Wellington. 'The full impact of this loss in connectivity may not be immediately clear, but it's a real shame this is happening just ahead of the summer season, when we rely on those connections the most.' The airline's challenges came to light during Covid, and it had continued to struggle over the past five years. Crawford said a Pilatus engine that cost US$850,000 (NZ$1.42 million) just a few months ago was now being quoted at US$1.4m (NZ$2.3m), and the passenger safety levy from the Civil Aviation Authority rose 145%. A PC12 aircraft was recently sold to help ease the financial burden, and last year Sounds Air axed its Wellington to Taupō and Wellington to Westport routes. LDR is local body journalism co-funded by RNZ and NZ On Air.