Kiwi Regional Airlines mulls crowdfunding new plane
Kiwi Regional Airlines says it is "seriously thinking about" crowdfunding to raise money to buy a second plane.
Chief executive Ewan Wilson says aviation is "an expensive industry" and that crowdfunding could be a novel way to raise money and give people a way to invest in the company.
"The Financial Markets Authority changed the legislation a year ago and New Zealand has in fact led the world in enabling small investors via a crowdfunding platform to be involved in equity within New Zealand companies," Mr Wilson told the Paul Henry programme this morning.
"For us it's not the $2 million -- and don't get me wrong, $2 million in the aviation sense is not a huge amount of money -- but what we're really interested in is in a community of New Zealand shareholders because we think that has a great deal of appeal."
The extra plane would not be used to expand existing routes but to "cover both our planned and unplanned engineering".
"We believe there's a considerable market for us to develop in the charter area so we're not trying to add any more frequency or capacity to that."
The airline launched in October last year but axed its flights between Dunedin and Queenstown just a month later after a run of weather-related cancellations and poor passenger booking numbers.
Despite the hiccup, Mr Wilson is confident in the company's potential.
"I've always said that we would try markets and if they didn't work we'd have the courage to say 'we got it wrong'."
He says it is hoped the company will break even after a year in business.
"The airline business is not the Auckland property market. It doesn't make money overnight but we are achieving our projections and we hope by the end of the fourth quarter now that we've implemented the last level of utilisation we will cover our costs and make some money."
If the crowdfunding venture does go ahead, bids would be turned into shares, Mr Wilson says.
"If we reached the target those funds would be turned into equity and they would become shareholders in New Zealand's truly only independent non-government owned regional airline."
Despite his optimism though, Mr Wilson has a warning for potential investors.
"The first thing I would tell you for anybody who is interested in investing in an airline don't go in to it lightly -- it's the most risky industry there is."