Working capital grants for regional airlines

The Regional Infrastructure Fund will distribute $5.7 million in working capital grants to regional airlines to help them manage rising operating costs, including fuel and aviation gas prices that have increased by over 50% since March. The funding aims to maintain service levels and preserve critical regional air routes that could otherwise become unsustainable due to financial strain. Grants will be allocated based on airlines’ annual passenger volumes and flight movements, with amounts ranging from $300,000 to $1.2 million depending on the size of the operator. The support is temporary and targeted, designed to provide immediate financial relief while airlines continue to provide essential connectivity for remote and regional communities.

Regional Development Minister Shane Jones highlighted the extraordinary challenges facing regional airlines, noting that the funding will help sustain routes that connect communities to healthcare, family, and business opportunities. The grants are part of a broader $26 million regional air connectivity package established in 2025, which has already provided nearly $26 million in loans for aircraft acquisition, fleet maintenance, and debt refinancing. The Government emphasized that the working capital grants are intended to cover day-to-day costs such as fuel and wages, ensuring airlines can maintain current service levels.

Associate Transport Minister James Meager stated that the grants are a practical measure to support regional airlines over the next 12 months, demonstrating the Government’s commitment to regional communities, airlines, and businesses. The funding is expected to provide financial relief while airlines navigate ongoing economic pressures, including high fuel costs and reduced passenger demand. The Government has reiterated that the support is proportionate and designed to address immediate needs without long-term obligations.

The working capital grants will be drawn from the remaining funds of the Regional Infrastructure Fund’s regional air connectivity package, which was established to support vulnerable regional air services. Airlines receiving grants must maintain their current service levels, aligning with the conditions attached to previous loans under the package. The Government has underscored that the funding is a temporary measure to ensure regional connectivity remains viable during a period of significant financial stress for the sector.