.jpg)
Whakatāne District Council has agreed to waive airport fees for Air Chathams for the next six months but has said no to other forms of financial support the airline has requested. The council also voted to run an expressions of interest process with the aviation sector asking them to submit proposals for business-friendly Auckland and Wellington services. "We are not an airline," Mayor Victor Luca told the airline's owner and chief executive Craig Emeny and chief commercial officer Duane Emeny on Thursday. The Emenys had fronted up to a council meeting to field questions from elected members about their requests for financial support made at a public excluded workshop in early March, which it said it required to continue operating the Whakatāne to Auckland route. Air Chathams warned in April that it was considering withdrawing from the Whakatāne to Auckland route as it had lost more than $1 million on the flight leg since April 2023. Their request from the council included writing off a $350,000 five-year loan paid to the council as support to restart flights during Covid-19 restrictions, 12 months relief from paying landing fees with the option to extend if route viability is poor, entering into a 50/50 profit and loss share agreement and providing a loan to buy another Saab340 aircraft. Air Chathams has since withdrawn the request for the loan to buy the aircraft as circumstances had changed to allow them to keep a Saab340 that is currently leased to Tonga's Lulutai Airlines for three months. They had previously planned to sell the aircraft to a Canadian airline late last year to increase their business' liquidity, but the sale and purchase agreement had fallen through. They proposed that when the Tongan contract ended at the end of June the aircraft could be used to restore Whakatāne's business flights provided the council was prepared to support the airline. "If we could work something out with council then we could bring back that dedicated aircraft." Air Chathams had provided an alternative proposal to the chief executive and two councillors but this had not been formally provided to council or tabled for consideration. It was not made clear at the meeting what the new proposal involved. Duane Emeny said they believed the Saab340 could work in Whakatāne. "We do truly believe that if we can partner with you properly and get this aircraft back on the schedule that people want, that five-to-10 years down the track you've got a thriving Eastern Bay of Plenty. You've got population growth, business growth, and you've got air connectivity to support that. I do think the Government is going to see the value in that very soon and it will benefit you." Dr Luca said he didn't think anyone at the table wanted to see the district lose an airline. "But we are a public service institution and we're here to serve the public - all of the public ... [Airlines are] a difficult business to make money in especially in provincial areas and I do think that, rather than us subsidising, it should be central government that comes to the party with its big checkbook. I think we need to do more along the lines of advocating to them." The council was unanimous in rejecting the proposal of entering into a profit and loss share agreement or providing a loan to purchase a new aircraft. Some of the councillors said, while they would not support writing off the $350,000 loan made in 2020, they would support an option to convert the loan to shares as this was a clause written into the loan contract. Air Chatham has said that when the loan was initially provided it was never the intention of the council of the time for it to be repaid. It had simply been a quicker way of providing financial support for the airline than having them apply for a grant. Councillor Julie Jukes, who was part of the council at the time, partially corroborated this at Thursday's meeting. "If I had to be honest, I don't think we did have any expectation that it was likely to actually be repaid. We needed to keep the airline going and it was hopeful that it would be able to be repaid, which was why it was set up as a loan." Councillors voted no to writing off the loan but most indicated they would be willing to consider some other option such as converting it to shares. Councillors Tu O'Brien, Gavin Dennis and Ngapera Rangiaho were adamant that it needed to be repaid. "It needs to be paid back. It's ratepayers' money, not ours. I would be happy for them to pay it off at $50,000 a year," Dennis said.
10 years down the track - these aircraft will be over 40 years old.
ReplyDeleteIt looks like the Metro may have been a better fit for this service than the Saab as it enabled a business friendly time table. From what I understand the all Saab service does not work from the business people who have to drive to Rotorua or Tauranga to catch flights. However, the Metros were getting on a bit and I can understand Air Chathams wanting to reduce the number of different types of aircraft in their fleet. The Saab mentioned in the story is a 340B -which does differ from the rest of their fleet from what I understand mainly with up rated engines.
ReplyDeleteAs a local with close ties to operational staff at Whakatāne Airport, I’ve had some insight into what’s been happening behind the scenes. When the Metroliner services ceased, Air Chathams ended their lease on the local flight crew accommodation and repurposed the crew vehicle based at the airport. From what I understand, there’s currently no intention to reinstate the popular morning business flights out of Whakatāne.
ReplyDeleteIn hindsight, it feels like Air Chathams may have backed the wrong horse. Rather than focusing on making one route truly successful, they’ve tried to make both the Whakatāne and Paraparaumu (PPQ) services work—splitting the schedule between the two using a single aircraft. This has meant PPQ flights in the early morning and late evening, and Whakatāne flights squeezed into the middle of the day.
This half-and-half strategy risks underdelivering for both regions. The morning and evening flights into Whakatāne had clearly served a purpose—catering to both business travellers and leisure passengers connecting to international flights. But instead of doubling down on what worked, Air Chathams opted to prioritise PPQ.
Let’s not forget: when Air Chathams first launched PPQ flights, they were scheduled in the middle of the day. It didn’t take long to realise that most travellers—primarily leisure-focused—were actually heading to Wellington to catch cheaper options. Now they’ve committed to that route, even as the long-term future of Paraparaumu Airport remains uncertain. Will PPQ even exist in a few years?
It’s possible Air Chathams are trying to hedge their bets—hoping to keep both services going until they’re forced to exit PPQ due to a potential airport closure. Then, perhaps, the aircraft will be reassigned to Whakatāne in an attempt to resurrect the business-hour flights. But by then, will it be too late? Could another operator step in and capture the opportunity Air Chathams let slip?
Only time will tell. As another commenter pointed out, the current aircraft fleet is nearing 40 years old. There isn’t an unlimited window left to get it right.
Someone commented on another site Barrier Air might have been interested in the early morning and evening flights-long way in a Cessna Grand Caravan (and no Tim Tams) but better than nothing.
DeleteIf they owned a Saab for each route, what would the aircraft do for the rest of the day?
DeleteThe PPQ route was a Saab from the start. Why would Air Chathams downgrade that established service later - when the Metros went from the WHK route?
ReplyDelete