Coronavirus in NZ: Government unveils details of $600 million aviation spending package

The Government has given the green-light to an almost $300 million aviation support package, as part of its plan to keep airports and airlines in business.

The spend, unveiled by Transport Minister Phil Twyford this morning, is just under half of the total promised $600 million aviation rescue package.

And that amount "may well" increase, Twyford told reporters this morning.

"We may well need to go back to the well and put more money into the likes of Airways and Civil Aviation in the months to come."

The first $270m tranche is about "encouraging the airlines to stay here," Twyford said.

"And [it's] for the ones that have had to scale back their services, to encourage them to come back as soon as possible."

From today, the Government will waive the fees for passenger-based government charges at a cost of $162m.

At the moment, airports and airlines pay Government agencies – such as Customs and the Civil Aviation Authority – for security measures and luggage screening.

But the Government's support package means those fees will be waived for at least six months.

"It's essentially a six month holiday from charges they normally have to pay," he said, before adding that timeline may be extended.

Some $37m will be spent to cover Airways New Zealand-related fees for the next six months – Airways provides New Zealand's air navigation and air traffic management services.

Finally, $70m worth of financial support will be made available to Airways, which is facing declining revenue.

Twyford also announced that any fee rises or pricing reviews from government agencies that charge fees at the border will be put on hold for 12 months.

This first tranche of the aviation sector rescue package was critical for the sector, Twyford said.

"If we don't have Airways at work, if we don't have the Civil Aviation Authority doing their job, our airports will close."

On Tuesday, the Government earmarked some $600 million for an "aviation support package" in its $12.1 billion Covid-19 spending plan on Tuesday.

But just days later, Twyford has admitted that even more money may be needed.

VirusFacts2

"I expect I will go back to Cabinet after more discussions with the sector about what we need to do," Twyford said.

Although Air NZ will be eligible for this fee waive scheme, there is another package on the way specifically for the airline

Meanwhile, he said the Government was "fully expecting" to have to charter aircraft to deliver "vital airfreight services", such as pharmaceuticals and high-value seafood.

'Welcome first step'

BARNZ (the Board of Airline Representatives New Zealand) says the $600m package is a "welcome first step".

But executive director Justin Tighe-Umbers said it did not provide much detail of the planned spend, other than to say it would "support the aviation sector and the protection of supply chains".

The E Tū union said the Government's package was the right approach.

"It's responsible to take care of basic infrastructure, and the package should stop the industry grinding to a complete halt," said assistant national secretary Rachel Mackintosh.

"However, we still don't know what this means for workers both at Air New Zealand and in the aviation industry in general.

"Our priority is always working people, and we are looking forward to the specific support for our members from both the Government and the employers."

The package comes as New Zealand's biggest airports continue to feel the impacts of the pandemic.

Auckland Airport has reported its passenger numbers are down 44 per cent, compared to the same time last year.