Air Chathams Inks Interline Agreement With Air New Zealand

By Andrew Curran.

Air Chathams, one of several carriers operating in New Zealand’s embattled regional aviation market, has received a much needed shot in the arm this week, signing an interline partnership with Air New Zealand. The outcome followed long-running talks between the two airlines.

“We’ve been working towards this ever since we took over the Whakatāne to Auckland air service in April 2015,” Air Chathams CEO Duane Emeny posted on LinkedIn. 

Starting with flights on the Auckand (AKL)  – Whakatāne (WHK) city pair, from December, passengers can book a single ticket for domestic trips involving both airlines.

“We look forward to nailing this trial and rolling it out to other key ports on our network,” said Emeny.

The family-owned airline, based in the Chatham Islands (CHT), around 800 kilometres east of the New Zealand mainland, operates scheduled flights to the Pitt Islands, Wellington (WLG), Christchurch (CHC), Whanganui (WAG), Whakatāne, Kāpiti Coast (PPQ), and Auckland.

Although initially restricted to one route and involving domestic connections only, Emeny said Air New Zealand wanted to improve its domestic connectivity and “support the visibility for travel to smaller towns and regions that are served by smaller regional carriers like us.”

A simple interline agreement normally wouldn’t raise much interest, but this one is significant because regional airlines in New Zealand are at risk of going out of business. Working with bigger carriers like Air New Zealand offers a way out of their difficulties.

The Air Chathams CEO, along with the CEOs of other second tier local carriers, have consistently called out the rising costs that are putting acute pressure on their operations. Earlier this year, Emeny said Air Chathams may be forced to suspend flights on the Whakatāne – Auckland city pair, having lost money on the route since 2023. A suspension now appears unlikely.

In July, another second tier New Zealand carrier, Sounds Air, said it was dropping Christchurch from its network, axing two routes in the process.

“Initiated by Covid, and persisting for the past five years, aviation has been severely hit by an escalating cost and supply chain structure, in conjunction with a very weak New Zealand dollar, that has threatened the viability of all regional airlines and the routes they serve,” said Sounds Air CEO Managing Director Andrew Crawford at the time.

More recently, after repeated calls for assistance, the New Zealand Government stepped up to offer a NZD30 million (USD17.1 million) support package for regional air services. Emeny called that outcome “a significantly positive day indeed for our airline, our people, and the communities we serve.”

This week, Air New Zealand Chief Transformation and Alliances Officer Mike Williams said working with Air Chathams on the Whakatāne – Auckland route was “step one” and a chance to get the components of the agreement functioning smoothly before looking at growing it. 

Air New Zealand axed its flights on the Whakatāne – Auckland route in 2014 following a series of financial losses across its regional network. Whakatāne is less than 300 kilometres from Auckland, as the crow flies, but the driving time is almost four hours.

Air Chathams does not compete with Air New Zealand on any of the seven scheduled routes it flies

Williams said Air New Zealand has around 50 similar interline agreements, but they mostly involve larger airlines connecting to other large airlines.

“It’s not that common to have these sorts of relationships domestically,” he told Newstalk ZB, saying the reason was that most domestic flying was point-to-point and there was far less transfer traffic through hubs than for international travel.

But he said there was no reason why the interline agreement with Air Chathams wouldn't work. “Today is a great day for Air Chathams, who have been serving Whakatāne well for a number of years,” Williams added. “Ultimately, this (interline agreement) is about connecting regions between Air Chathams’ network with regions from Air New Zealand’s network.”

Photo: Air Chathams.