Coronavirus financial package: Aviation industry welcomes $600m

Name: Focus Live: The government’s economic response to coronavirus
Uploaded: 2020-03-17T13:34:41+13:00
Duration: 1011 s
Description: At the beginning of March before New Zealand felt the full grip of Covid-19, Finance Minister Grant Roberson unveiled the wage subsidy scheme as an economic response to the virus. Video / Mark Mitchell

By Grant Bradley

Deputy Editor - Business·NZ Herald·

17 Mar, 2020 04:35 AM3 mins to read

At the beginning of March before New Zealand felt the full grip of Covid-19, Finance Minister Grant Roberson unveiled the wage subsidy scheme as an economic response to the virus. Video / Mark Mitchell

The aviation sector has welcomed the Government's announcement of $600 million to support their businesses.

Justin Tighe-Umbers, executive director of the Board of Airline Representatives New Zealand (BARNZ), says the package will be a lifeline, but over coming months more will be needed. The package aims to protect supply chains, and help with the repatriation of New Zealanders now that many airlines are cutting services.

E tū, the union representing 8000 aviation workers has also welcomed the package.

But one of the big victims of the coronavirus crisis is not covered by the package. Air New Zealand - facing a massive blow to revenue and forced to layoff up to a third of its staff - is excluded from the package.

Finance Minister Grant Robertson said he is still in talks with Air New Zealand.

Analysts expect the Government - which owns 52 per cent of the airline - will be called on to underwrite a capital injection.

Tighe-Umbers said support from Government will help provide liquidity into the aviation system.

"More will be needed to help re-establish New Zealand's connections to the world and get this country's $17 billion tourism sector back on its feet."

The 28 airlines represented by BARNZ are making drastic cuts to their New Zealand schedules, with more than 80 per cent reduction common. Others are suspending flights.

"The scale of airline cuts made this week has never been seen before," he said.

"Airlines are in a fight for their lives.''

New Zealand needed to act fast to safeguard its air connections to the world, ready for when Covid-19 subsidies and air travel picks up again.

"The real danger is that we lose critical aviation resource in the short-term, only to find we can't scale the system back up when needed."

He said Barnz would meet the Government in the next 48 hours to flesh out the details of the package.

E tū is welcoming the Government's first phase of the financial stimulus package.

E tū assistant national secretary Rachel Mackintosh says that the announcement is a strong start and will help some workers deal with the stress that Covid-19 (coronavirus) is causing in their work lives and beyond.

"We eagerly anticipate the details of the package that will relate to certain E tū members, such as the over 5000 at Air New Zealand. We urge Air New Zealand and other aviation employers to come to the party, as the Government has done,'' she said.

"We particularly welcome the aspects of the package that support all working people, whether they are employees, contractors, or casual workers.

However, she said that many E tū members would need further assurance that they will be looked after.

"The $100m allocated for assisting with redeployment will be crucial for our members who are already facing redundancies. Redeployment needs to happen effectively, which means consolation with workers, unions, iwi, and the wider community.''