No don’t subsidise airlines

The Rotorua Daily Post reports:

Whakatāne Mayor Victor Luca has made an appeal to the Government for support to keep Air Chathams flying out of Whakatāne.

A response from Associate Transport Minister James Meager has provided hope, though no firm promises.

Earlier this year, Air Chathams requested additional support from Whakatāne District Council, saying it would otherwise have to discontinue its route between Whakatāne and Auckland.

The council refused the majority of Air Chathams’ requests, taking the stance that it should not be up to ratepayers to fund a commercial operation that a large portion of the district’s population did not use.

This is the right call by the Council. The Government should make the same call.

Neither taxpayers nor ratepayers should subsidise airlines.

He pointed out that, in the 2023 financial year, Air NZ made a $412 million net profit.

“A subsidy of $1m to Air Chathams from Air NZ profits would represent only 0.2% of that.”

This would be subsidising mainly wealthy people.

Let’s say for the $1 million subsidy wanted you get one flight a day to and from Whakatane. Probably a Saab340 with 34 passenger capacity. On average 75% of seats filled so say 26 passengers a day.

That works out to a subsidy of around $105 per passenger. And many of this epassengers might be repeat travellers who have work in Auckland so wealthy Whakatane business persons might get $2,000 a year or so to subsidise their flying.