Fares up, routes cut, planes sold: Passengers pay price as fuel crisis engulfs regional airlines

Thursday, 18 June 2026

Regional airlines are cutting routes and selling planes to make ends meet.

Sounds Air boss Andrew Crawford says his fuel bill has risen $350k in the past three months and accused fuel companies of “out-and-out greed”.

“People want to fly but we have to put prices up to keep fuel companies rich,” he says.

Air Chathams says Government loans will help, but are only a stopgap.

Regional air travel is facing extreme turbulence as soaring fuel costs and the cost of living crisis make many routes uneconomic, says Air Chathams general manager Duane Emeny.

With fuel prices continuing to bite, Emeny will suspend the Auckland-Kāpiti route at the end of July, a move that has prompted one regular passenger to lobby his local MP for support.

“We didn’t need the surge in fuel costs,” Emeny says. “It happened so quickly we had no ability to adjust.

“It’s tough times for regional airlines. We were re-forecasting down already but we didn’t even meet the bad forecast.”

Emeny has stripped back the company’s North Island services and when they stop flying the Auckland to Kāpiti route, travellers will have to drive to Wellington or Palmerston North before flying north.

Dean Brian, who takes the flight weekly, has written to his MP, Tim Costley, suggesting scrapping the route will have a significant impact on the region’s economy.

“The Kāpiti Coast's ability to attract and retain commercial activity depends on connectivity to Auckland,” he wrote.

“This isn't sentiment – it's economics. The service has operated since 2018 and stepped in when Air New Zealand walked away.

Email the reporter: jim.kayes@stuffdigital.co.nz

“It would be a serious failure of policy to allow it to disappear simply because the regulatory cost structure makes viability impossible.”

Brian told Stuff commuting to Wellington for an Air New Zealand flight could take up to two hours drive time there and back, and cost up to $150 in petrol and parking. An Uber or taxi would be just as expensive, one way.

In contrast, it was a 20-minute trip from his Ōtaki home to Kāpiti Airport in Paraparaumu, where parking is free. “And time is money, so the time it takes to get to Wellington or Palmy is a waste,” Brian said.

The Air Chathams service was “exceptionally reliable” he said, and good value for money as a 10-trip deal cost $2000.

“I don’t want to shoot myself in the foot here, but if they put that up to $2500 it would still be cheaper than flying out of Wellington on Air New Zealand.”

‘SH1 for the Chats’

Emeny’s father, Craig, started Air Chathams 40 years ago and it remains an essential service for the island’s 700 inhabitants.

“We are State Highway 1 for the Chats. We are the only way to get there, we’re that essential.”

But he is going to sell the 68-seater ATR that has flown to the island, about 800km east of the South Island, for the past three years and use two 34-seat Saabs instead, one flying freight and the other passengers.

He’s confident that will provide a better service to the remote island and that the $7-10m they should get from the aircraft sale will help balance the books.

But Emeny says getting rid of assets had longer-term implications.

“We are well down on last year and last year wasn’t great, and with the dollar so low you’d be silly not to look at selling aircraft. But it is hard to scale back up again [when the economy improves]. It’s effectively cutting regional air connectivity off at the knees.”

Sounds Air chief executive Andrew Crawford has already sold six aircraft and cancelled five routes - and that was before the fuel crisis. Now, he has reduced flights on his routes criss-crossing Cook Strait by 22% this month, and they will be trimmed by 30% for each of July and August.

‘Out-and-out-greed’

Crawford said the state of regional aviation was “terrible”, with the fuel crisis adding $350,000 to his fuel bill in three months.

“Where is that meant to come from? There has been this insidious creep since Covid where the fuel companies are making billions of dollars of profit at the expense of the public. It is out-and-out greed.

“People want to fly but we have to put prices up to keep fuel companies rich.”

Regional Development Minister Shane Jones and Associate Transport Minister James Meager earlier this year announced loans for airlines hit hard by the fuel crisis.

They have included a $17.2m loan to Air Chathams, $4.5m for Sounds Air, $1.1m for Golden Bay Air and $252,000 for Island Air, who fly from Tauranga to Mōtītī Island. About $7m remains in the ring-fenced fund.

Emeny said the fund was helpful “but it really just means we can move our debt from expensive debt with the bank to less expensive debt”.

“It still needs to be repaid but it does keep the wolf from the door.”

‘No government buffer’

Air Chathams passenger Brian wants Costley, a pilot in the Royal New Zealand Air Force for 23 years, to look into the regulatory costs regional airlines face. In his letter to the MP he said the Board of Airline Representatives NZ had noted New Zealand's user-pays aviation framework.

“CAA levies, Airways NZ charges, compliance costs and airport charges all land directly on airlines and passengers with no government buffer.”

Costley told Stuff an easy step would be to remove the Aerodrome Flight Information Service from Kāpiti Airport, as it has been from other small airports.

The air-to-ground communication and advisory service gives pilots critical information like local weather, aerodrome conditions and known air traffic, but leaves the ultimate decision-making up to those flying the plane.

“[Removing] that would save about $1m a year and Air Chathams say it will save them half a million. It’s about $35 a ticket,” Costley said.

“We don’t need it and I’m confident in my view. It will be a huge cost-saver for the airport, for the airlines and for paying passengers.”

‘Road in the sky’

Emeny and Crawford want the Government to see air routes in the same way they do roads like Transmission Gully, the 27km highway that cost $2.5b to build.

“We need to see regional air travel as a road in the sky,” Crawford said. “The Government is pouring money into roads, rail and the ferries and there is this view that aviation is rolling in money. We aren’t, but air travel is essential.”