Government provides $5.7m to support regional airlines facing high fuel costs
Monday 5 October 2026 · 4 outlets · 4 reports · updated In this story Shane Jones, Regional Infrastructure Fund, Originair
The Government is providing $5.7 million from the Regional Infrastructure Fund to assist regional airlines with rising operating costs. Ministers Shane Jones and James Meager announced the support to help maintain essential routes as jet fuel and aviation gas prices have increased by more than 50 per cent since March.
Key facts
5 facts
- Total new funding: $5.7 million
- Funding source: Regional Infrastructure Fund
- Grant range: $300,000 to $1.2 million
- Fuel price increase: over 50% since March
- Previous package value: $30 million regional air connectivity package established in 2025
The full story
1 min read · 2 outlets
The Government is providing $5.7 million in support to regional airlines to help manage rising operating costs. This funding will be drawn from the Regional Infrastructure Fund to assist airlines facing pressure from jet fuel and aviation gas prices, which have increased by more than 50% since March.
Regional Development Minister Shane Jones and Associate Transport Minister James Meager announced the grants, which will range from $300,000 to $1.2 million. Allocations will be determined by flight movements and annual passenger numbers. The support is intended to cover day-to-day costs such as wages and fuel, with the expectation that airlines maintain current service levels for the next 12 months.
This new funding is part of a $30 million regional air connectivity package established in 2025. The Government has previously issued nearly $26 million in loans through this package for purposes including debt refinancing, fleet maintenance, and aircraft leasing.
Sounds Air chief executive Andrew Crawford stated the airline had spent an additional $600,000 on fuel over the last eight months despite reducing services. Crawford noted his airline had been forced to cut 30 per cent of its flights this year to manage fuel expenses.
Where reports differ
- One report specifies the previous $26 million in loans included recipients such as Sunair and Island Air, while the other only mentions Air Chathams, Stewart Island Flights, and Golden Bay Air.
Compiled from reports by NZ Herald and RNZ.