Air New Zealand's CEO Nikhil Ravishankar suggested a "situational subsidy" to support regional routes. Photo:
Finance Minister Nicola Willis and Deputy Prime Minister David Seymour have poured cold water on the suggestion of subsidies for some provincial routes.
The new chief executive of Air New Zealand Nikhil Ravishankar suggested on RNZ's Checkpoint last week what he called a "situational subsidy" to support regional routes when the economy is not doing well and demand is low.
But the Finance Minister told Morning Report today she had had no approaches from anyone at Air New Zealand.
"I am not sure that is a fully fleshed out proposal. certainly I have not had any approaches from Air New Zealand on that subject. I think it was more the Chief Executive musing out loud."
Nicola Willis said the Crown as majority owner would want the airline to run its business as well as possible.
"In the first instance we would like to see Air NZ focused on its own commercial performance."
She said it was important to note that any subsidies would come at the expense of other investments like in schools or hospitals.
Air New Zealand chief executive Nikhil Ravishankar told Morning Report today he will talk to the government and other aviation groups about sustaining regional air routes.
"A lot of our regional routes tend to be sub economic and that's just the fact and there are many ways we can continue to support these communities," he said.
Nikhil Ravishankar said his priority is to make air travel affordable for New Zealanders and the airline's costs have risen sharply, reflecting in part the increase in fees.
"We will continue to work hard to keep those communities connected, there's work to be done around how to make that sustainable in the future.
Subsidies is one way but not the only way."
He added high prices for late bookings is a way of maintaining a demand and supply balance.
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