What it means to ordinary kiwis
The withdrawal of a major airline from some regional routes over the past three years has prompted questions about the resilience of the air transport links that connect our regional populations and economies.
New Zealand now has a two-tier national airport network, split between the haves and the have-nots.
Larger regional airports, together with the international airports they feed into, have sufficient revenue to fund their operations. But over the past two decades, smaller regionals and remote airports have slipped into the realm of being non-commercial entities.
This has broad ramifications for the economic and social outcomes for our regions as well as an impact on the national economy.
Unlike road and rail, there is no specific policy framework or funding support mechanisms for regional aviation in New Zealand (except historic half ownership of five small airports).
LOss of airline services
In recent years, the national carrier has withdrawn or decreased the frequency of services to many smaller airports across New Zealand due to low yields and fleet changes.
Many of the airports have found replacement air services provided by independent regional airlines. These tendered services are often underwritten by local councils, who guarantee a minimum income per flight or fixed fares.
Regional carriers not franchised by Air New Zealand are unable to offer their customers frequent flyer points, baggage interline or international connections. This lessens their attractiveness to the business community and reduces international promotion.
A constant concern is the timing of services, with business-friendly flights preferred by enterprises in smaller communities
poorer disaster response
The national contingency plans pulled together in the aftermath of the 2011 Christchurch earthquake assume access to all current airports, airstrips and aerodromes in the event of a future natural disaster.
Frequent runway maintenance is essential to ensure access for heavier lift aircraft that can be used to move earth lifters into place rapidly in the event of natural disasters.
There is a fear that once small airports lose their regular passenger service, runway, taxiway and apron maintenance programs could suffer. Experience in Australia has shown that those aerodromes not receiving federal maintenance grants have fallen into disrepair.
The government recognised the link between disaster response/recovery and regular air services to smaller towns in its talks with Air New Zealand to resume services to Blenheim following the 2016 Kaikōura earthquake.
It its 2016 recent Business Growth Agenda, the National government recognised the need for strong regional economies. In it, it said:
“We need the businesses in each region to be successful, delivering high quality products and services that contribute to the national economy and that generate jobs and good living standards for local people”
With a decrease, or cessation, of air services regional businesses face a higher barrier to essential national and international connectivity.
The entire national economy relies on policies that can foster a viable, competitive and safe aviation industry across the entire country. Experience from other countries shows net returns on gross domestic product from regional aviation infrastructure investments.
Normal commercial pressures have led Air New Zealand to rationalise its fleet and phase out the aircraft more suited to serving smaller centres. Its successors on regional routes are faced with little choice in aircraft as there is a lack of suitable replacements being manufactured in the sub-50 seater category.
New Zealand has some of the oldest commercial aircraft in regular passenger use in the developed world flying on regional routes, but in practice most are still supported by manufacturers and can be operated indefinitely.
However the airlines serving small towns face the problems of funding fleet replacements, and/or retro-fitting older aircraft with new avionics for satellite navigation. This requires reasonable financial returns - which places pressure on councils to underwrite the services.
At the smaller end of the scale, operators can use modern single engine turboprops for regular passenger transport under instrument flight rules, such as 12-seat Cessna Caravans and the 9-seat Pilatus PC-12 for some services.
LACK OF INTERCONNECTIVITY
The shift from national carrier to independent regional airlines is an important commercial factor in today’s regional aviation environment.
Other countries have found the removal of a major carrier from regional routes can have longer term negative impacts, due to the lack of interconnectivity between airlines.
In airline terms, interlining agreements cover baggage transfer, ticketing and customer service between regional and domestic service operators.
However, as tourism industry associations in Australia and Europe have found, interline agreements are also crucial to ensuring the national and international marketing of regional destinations by major airlines.
Today’s interline agreements also commonly feature special pro-rate agreements, codesharing and direct connections at hub airports that are important to regional business travellers. Unfortunately, these benefits have been lost with the withdrawal of Air New Zealand from regional routes.