Government support for airline freight scheme heads for $1 billion with year-long extension

Government support to keep airlines flying here by supporting freight operations will reach nearly $1 billion.

Today’s $250m extension of the Maintaining International Air Connectivity (MIAC) scheme has been welcomed by airlines and is a sign the Government doesn’t expect them to be able to rebuild devastated passenger schedules in a hurry.

The scheme was due to finish at the end of the month after the Government had spent $730m on MIAC and its predecessor.But, as expected, Transport Minister Michael Wood has extended it – this time for a year.

Overseas visitors are still unable to easily come into the country and the number of passenger flights into New Zealand is only a quarter of pre-Covid levels.

The extension is aimed at giving airlines more breathing space.Some near-empty passenger flights are only viable with the Government’s support.

The Board of Airline Representatives says the extension of the scheme is much needed but the Government could do more by committing to allow foreign visitors into the country isolation-free in time for the April school holidays. The board’s aviation development manager Patrick Whelan said airlines were now planning their networks for later in the year and for New Zealand to be part of them they needed certainty about border plans now.

Wood said that as New Zealand reconnects with the world, the Government expects to see a significant increase in traveller numbers over the next year. By extending the MIAC scheme we can ensure our aviation sector is well-placed to support this rapid rebound in passenger volumes,” Wood said.

Since May 2020, MIAC support has enabled more than 12,300 flights carrying over 235,000 tonnes of airfreight with a trade value of $18.8b During the same period, nearly 105,000 people have returned to New Zealand on MIAC supported flights, which amounts to approximately half of all those who’ve passed through MIQ facilities.

Wood said this was the final extension of the scheme.It would provide much-needed certainty as passenger travel recovers, ensuring there are regular international flights for travellers and freight.

It allows the country to grow its export base and get time-critical supplies such as medicines and special equipment here.

Support levels will be scaled-back and ultimately end as international flight frequencies and passenger numbers return to normal.

MIAC support on flights to and from the Cook Islands had ended because of quarantine-free travel, and the opening of borders with Australia means that will likely be the next market that will bounce back to pre-Covid levels.

The Ministry of Transport is working with airlines to confirm the routes and services that will be supported during the extension period. The exact schedule of services under the MIAC extension will be finalised over the coming week Wood said.

Whelan said the phased approach to support was sensible.

“Airlines want to get back to covering their costs on all flights as soon as possible, but that will need the border letting in international visitors to be sustainable. This extension supports keeping our critical routes open through the transition,” he said.

Airlines around the world are in recovery mode and deploying aircraft where they can start to rebuild.

”If the MIAC scheme had been halted, New Zealand faced a threat of losing airfreight channels when sea freight globally is still facing enormous challenges.”

Air New Zealand has been the main beneficiary of the scheme. Other airlines to have participated include Emirates, Cathay Pacific, China Airlines, Malaysia Airlines, Air Tahiti Nui, Korean Air and Air Calin.

In spite of Government support, the tight global freight market has resulted in charges for air cargo rates to and from New Zealand typically up three times compared to before the pandemic.

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