Airline cuts back Chch routes as costs surge
The airline will no longer fly Blenheim to Christchurch or Christchurch to Wānaka from the end of September.
That was after cancelling its services from Wellington to Taupo and Wellington to Westport last December and selling an aircraft.
Sounds Air managing director Andrew Crawford told Nine to Noon aviation has been severely hit by escalating costs, supply chain challenges and a weak New Zealand dollar that was threatening the viability of all regional airlines.
"In the last three months, we've had another half a million dollars of annual costs imposed on the business and at some point, you've just got to say 'no more. We just can't do it'," he said.
Instead, the business will focus on its core regional services, selling its fleet of five Pilatus aircraft and expanding its Cessna Caravan fleet that operates in and around the Cook Strait.
The decision will cost 10 staff their jobs across the Wānaka and Christchurch bases.
Crawford said they were flying more passengers than ever but the costs were so high, engineers were difficult to find and keep, and they had exhausted all other options to make the business viable.
Pre Covid, one of the avionic parts needed cost $28,000, but now the business was paying $70,000 for the same part.
"How many seats do you have to sell on a nine seat aircraft to make that work? It's impossible."
He acknowledged that people were already paying more for flights, saying fares had gone up more than 20 percent since Covid and they could go up another 20 percent and it still would not be enough.
Another cost was the recent hike of the passenger service levy from the Civil Aviation Authority, which he said would cost the business close to $300,000 a year.
"Where are we supposed to get that from? We've just got to pull that on the travelling public."
They had reached out to the government numerous times to no avail, being told the business did not meet the criteria for the regional infrastructure fund months after being told to apply for it, he said.
He was worried about the many regional people who used the flights to access healthcare and what they would do, Crawford said
The change was a relief in some ways as the pressure on the business, staff and shareholders was extreme, he said.
He was confident about the future of the business with its renewed focus on the Cook Strait, saying it was much more sustainable.
"The numbers we're seeing are just astronomical. We used to do four flights a day in and out of Nelson, I think on Friday, we did 12. The demand is there, people are flying and these are cheaper aircraft to maintain."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Spinoff
14 minutes ago
- The Spinoff
Big international stadium tours are cannibalising local music
The calls are growing louder and more desperate for the world's biggest pop stars to include Aotearoa on their global tours. We ought to be careful what we wish for, writes Ben Howe. Recently, many have been asking why so many global blockbuster music acts venture no further south than Australia. Major artists such as Taylor Swift, Oasis and Billie Eilish have caused much fan angst – how could they pass us by? This has coincided with much discussion on large-scale events, among them competing stadium proposals for Auckland's Western Springs and Green MP Tamatha Paul advocating for an arena venue in Wellington. Music journalist Chris Schulz has been a zealous voice, writing passionately on the perceived shortage of global hitmakers visiting our shores. An arena show can be a memorable experience. I still recall, as a child, attending Bob Marley's legendary 1978 Western Springs show with my parents. However, too many international events coming down here can also have a hidden cost for local music, one which is not healthy for our industry and the overall economy. But, let's begin with one thing arena event campaigners and myself do agree on; that live music is important. A recent study by my colleagues at Massey University, Measuring and Articulating the Value of Live Performance in Aotearoa, found that live events benefit individual and community well-being. It estimates the economic, social and cultural value of the live performance sector at a hefty $17.3 billion. The research, however, also identifies that cost is the primary barrier preventing people from attending more live events. Simply put, individuals have limited disposable income. Gigs are expensive and we can't go to everything. A big night out, including parking, dinner, babysitters, stopping off at a bar in Kingsland before Coldplay, for example, means those same dollars can't be spent at a different restaurant, in another town, on a different day. This is why regions around Aotearoa seek to capture a greater share of the events market. They compete internally by subsidising various fixtures, hoping to encourage domestic tourism and boost local businesses. Crucially though, this substitution of the dollar also affects local music. If fans don't blow their entertainment budget on an epic rock night with Pearl Jam, then they'll get sweaty with Wellington's DARTZ instead. Hirsute metalheads might appreciate swords and sorcery with Auckland's Princess Chelsea, in place of Metallica. Imaginative perhaps, but my overall point is we know these sort of exchanges do happen. When the borders were closed (but we could still attend events) during Covid, people tried different things; local live music thrived. International arena events also don't grow the overall entertainment dollar, because they don't bring in overseas fans. In the 2024/5 financial year the international tourism spend was $12.2 billion, of which 9% was on 'entertainment'. Only 6.2% of visitors to this country said an event brought them here, but this includes personal occasions such as weddings. In this study, sport captures 2.5% and music isn't even mentioned. Instead, if we bring in more big arena shows, this will capture a greater share of our finite live music market. Most of these shows are promoted by the major multinational companies such as Live Nation and TEG. These businesses' primary focus is maximising market share. In order to achieve this, they consolidate vertical integration and venue ownership – clipping your dollar from the ticketing fees to the beer at the bar, along with everything in between. Among the live music infrastructure controlled or owned by these companies is Ticketek (TEG), Ticketmaster (Live Nation), Spark Arena (very convoluted but ultimately Live Nation), Laneway Festival (TEG), Rhythm & Vines (Live Nation) and many others. Overseas, this market dominance has resulted in accusations of anti-competitive behaviour. In addition to stadium tours cannibalising local music, a large proportion of the income and profits generated from stadium events in Aotearoa flows offshore. This extraction can happen via the sizeable artist fees, the international promoter's cut, ticketing companies and in many other ways. In contrast, with local artist shows and events, most economic benefits circulate internally. Riding this recent wave of arena show flag waving – or possibly generating it – some major international music promoters have started calling for tax incentives and government support. They say help is needed to assuage the challenges landing the desirable but slippery big fish. Apparently, we need to start pumping more megastars through the pipeline. How else will we fill all the stadiums we've built or are building? While public funding and support for arts, culture, and music is important, it must be used in ways that generate value for the local music community and economy – ones that support grass roots music and develop our own global success stories. We could also learn from our cousins across the ditch. They are developing intelligent ways to safeguard Australian music. One of these is called 'Michael's Rule', a self-regulating system where all international tours must have a local support artist. While international mega-gigs do have their place, to ensure things are fair for local artists, we need to cultivate more policies such as 'Michael's Rule'. In the arena show discussion, it is important to consider the interests of the Aotearoa music community.
Otago Daily Times
3 hours ago
- Otago Daily Times
KiwiSaver hardship withdrawals boom
By Susan Edmunds of RNZ and Nine to Noon More than 50,000 people made withdrawals from their KiwiSaver accounts on the basis of hardship in the year to June - compared to about 18,000 five years ago. KiwiSaver provider Simplicity chief economist Shamubeel Eaqub said the increase started in 2023 and the reasons were easy to understand - the recession and cost-of-living crisis were putting ongoing pressure on people's budgets. "But some context - the number of hardship withdrawals were 1.6 percent members, and 0.3 percent of savings. The hardship, as is true for the wider society, is concentrated pain among a few." Sorted's personal finance lead Tom Hartmann told RNZ's Nine to Noon programme today it was likely the ability to withdraw from KiwiSaver was giving people "peace of mind" that if their situation worsened they could draw on their savings. The average withdrawal was $8800, he said. For someone in their 30s earning $75,000 a year, a withdrawal of that size in a year could reduce their not-inflation-adjusted final balance by about $40,000. Hartmann said there had not been an increase in savings suspensions, which indicated that the withdrawal was a temporary stop gap for people who would get back to making contributions. People can opt to stop contributing to KiwiSaver for a year at a time, and can renew the suspension at the end of the 12 months. The number of people on a savings suspension had dropped from 89,000 a year ago to 85,000. Hartmann said the key thing for people considering a withdrawal was to make it a last resort. "Typically, there are other sources of support that need to be explored first." Financial helpline MoneyTalks was one option, he said. "The team there have reporting seeing an increase in even middle-income people exploring their options." Eaqub said for people making a withdrawal, it was often a choice between "certain hardship today versus more savings later in life". But he said the situation was worse for those without KiwiSaver. "Many low-income people do not contribute to KiwiSaver because the employee contribution lowers their take home pay. "But they also miss out on the employer contribution and government subsidies. It means when non-contributors face hardship, they do not have this fallback." But Rupert Carlyon, founder of Koura KiwiSaver, said people on lower incomes could build up good balances. "Someone earning $60,000 contributing 3 percent will end be putting in [about] $3500 per year, so over 10 years plus returns that really adds up. "You can easily see a $60,000 salary becoming a $45,000 balance over 10 years. That is the power of KiwiSaver, we are often encouraging people to save that would not otherwise do it."
Scoop
4 hours ago
- Scoop
‘Perfect Storm' Of Global Crises Drove Years Of Food Price Surges: FAO
22 July 2025 The report, to be released later this month, reveals how between 2020 and 2024, the world experienced a dramatic increase in food prices driven by a combination of COVID-19 inflation, the war in Ukraine restricting movements on food and commodities, and increasing climate shocks. 'The episodes described in this publication bring up what we call a perfect storm,' said Mr. Torero Cullen. Máximo Torero Cullen speaks to journalists at the UN HQs via video link. First, he explained that during the COVID-19 pandemic, governments launched fiscal stimulus and relief packages, which increased demand and, thus, global inflation. Russia's full-scale invasion of Ukraine compounded this crisis. Before the war began in 2022, Ukraine was a key exporter of wheat, sunflower oil and fertilisers. The war not only restricted these exports but disrupted trade routes and pushed up fuel and input costs, which amplified inflation across the world. Additionally, increasingly frequent and intense climate shocks in major producing regions – such as droughts, floods and heat waves – further aggravated food inflation. Worldwide impacts Only in 2024 did prices return to pre-COVID levels, meaning that households struggled for multiple years to afford food, with major consequences. As real wages fell while food prices increased, household purchasing power was eroded. Households responded by buying cheaper and less nutritious food, reducing meal frequency, and often prioritising meals for certain family members and reducing intake for women and children. Mr. Torero Cullen also explained that an increase in food prices directly correlates to an increase in moderate and severe food insecurity. The impacts of this were particularly harsh in Africa and Western Asia, where food imports, dependence and currency depreciation made food even more expensive. Moreover, as food prices increased, nutrition outcomes among children under five worsened. The SOFI report illustrated that a 10 per cent food price increase led to a 2.7 to 6.1 per cent increase in moderate to severe wasting, which has long-lasting effects on child development and public health systems. Notably, these grave impacts were uneven, mostly affecting low-income and African countries – many of which are still seeing worsening figures. During the peak of the crisis in January 2023, some low-income countries experienced food price inflation of up to 30 per cent, compared to 13.6 per cent globally. Policy recommendations Mr. Torero Cullen finished his briefing by outlining the policy prescriptions detailed in the SOFI report. He first underscored targeted fiscal support. 'Social protection measures are the most effective response to food price spikes,' he explained. 'This will protect vulnerable populations without creating long-term fiscal risk or market distortions.' He also highlighted avoiding trade disruptions, coordinating monetary and fiscal policies, improving market transparency, and institutional preparedness as essential components for avoiding future crises. 'This SOFI underscores that inflation can undermine progress. It underlines our vulnerabilities, and it also brings the importance of strengthening resilience, inclusiveness and transparency to be able to avoid and minimize the risk of these problems,' he concluded.
