Too many airports? Rising costs force reckoning for regional air links

Thursday, 19 March 2026

Originair announced on Wednesday that it would stop servicing Westport Airport if it didn’t get more Government support, leaving the West Coast town with no operating airlines.

New Zealand may have too many regional airports, as rising fuel costs and shrinking services force a reckoning over which ones can survive.

The 20%-plus jump in fuel prices since the Middle East war began last month has triggered questions about the viability of the country’s spread-out aviation network.

Air New Zealand has already cancelled 1100 domestic flights, affecting about 44,000 passengers, as airlines respond to the spike in fuel costs. But the pressure is falling hardest on smaller routes — and the regional airports that depend on them.

On Wednesday, Originair said it would stop flying from Westport if it did not get Government support in the face of high costs. The move would leave the West Coast town - two hours from the next closest airport - with no commercial airline services.

South Island and Associate Transport Minister James Meager said he understood Originair had withdrawn its application for a loan from the Government’s Regional Infrastructure Fund - set up to make $30 million available to regional airlines.

Instead the airline wanted “an alternative form of operational funding support” for the Westport route outside the scope of the fund, he said.

Simplicity chief economist Shamubeel Eaqub says 27 airports may be too many for a country of 5 million.

Strong regional connectivity is one of his top priorities, Meager said, and any decision by Originair to cut the route would be disappointing to those relying on it.

Simplicity chief economist Shamubeel Eaqub said New Zealand’s sparse population means fewer regional airports are needed.

After Air New Zealand announced cancellations, Eaqub said he examined whether 27 airports for 5 million people makes financial sense.

It was time to consider consolidating the network, including potentially merging airports such as Nelson and Blenheim, he said.

He proposed closing 10 airports - Blenheim, Kaitaia, Kāpiti, Masterton, Rotorua, Taupō, Timaru, Wānaka, Westport and Whakatāne - as they are all within two hours of another airport and do not serve enough passengers to remain sustainable.

“What we have is this large number of infrastructures, but we’re not funding them properly to have the depth and variety of connectivity.”

Eaqub questioned whether the country wants services where there is little demand.

“If we do, then we have to give more subsidies to make those services commercially viable and frequent, or we should have a deliberate conversation about consolidation, so that one of the two airports gets all of the … support.”

Meager said the Government’s focus is on supporting Kiwis, not the “the speculative musings of a big city economist.”

“At a time where fuel prices remain volatile and where all New Zealanders are worried about the impact of the Iran conflict here at home, speculative, and inflammatory comments like this are both unnecessary and unwelcome.”

Marlborough mayor Nadine Taylor at Blenheim Airport.

“We remain committed to regional New Zealand and regional connectivity. Our focus is on how we support Kiwis, not on the speculative musings of a big city economist.”

Eaqub’s suggestion comes as regional airports have already been steadily losing services over the past decade.

Marlborough mayor Nadine Taylor said Eaqub is “well off the mark”, and his suggestion is “not credible”.

Timaru Airport has direct flights to and from Wellington.

She said the town’s airport, which is 100% owned by the Marlborough District Council, is efficient and makes a small profit.

“The economist should stay in his lane. It’s a two-hour drive to Nelson and four and a half hours to Christchurch.

“As the owner of the airport, I can say it runs as a viable economic unit, and doesn’t require subsidies.

“We are a scattered nation - if we want efficiency we are all going to live north of the Bombay Hills. Or we need to get to grips with living regionally.”

Timaru mayor Nigel Bowen acknowledged his town’s Richard Pearse Airport “doesn’t wash its face” and flights require subsidises. The airport has 15 flights to and from Wellington each week.

Originair chief executive Robert Inglis says no passengers will be affected if the airline stops operating out of Westport in May, because no bookings had been made.

“But look at the importance of that location for businesses. An estimated 50% of those passengers are business travellers,” Bowen said.

“The reality is you drive a couple of hours to Christchurch, and sometimes have a stay overnight. When you look at the cost of that, the direct link makes sense.”

Bowen said the current schedule requires the pilots and crew of Air New Zealand's Q300 turboprop craft to stay in Timaru overnight.

“So there could be potential cost-saving there.”

Buller mayor Chris Russell said fuel costs were the final straw for Westport.

“We acknowledge that operating the route profitably has always been challenging, and that the small market and ever-increasing operational costs have added significant pressures that Originair cannot continue to absorb without external financial support,” he said.

“The decision to withdraw is deeply disappointing for council and the community, and we are acutely conscious of the impact this will have on our hard-working airport staff and their families.”

Originair chief executive Robert Inglis said the airline had been considering cutting the route for some time, so bookings from early May were not opened and no passengers would be directly affected.

He said jet fuel had almost doubled in price since late February, though the company was not currently considering shutting down other routes.