Direct flights between Auckland and Invercargill will begin next month and the Government is investing in airport upgrades to help make it happen.
The $3 billion Provincial Growth Fund (PGF), led by Regional Economic Minister Shane Jones, will invest $500,000 into Invercargill Airport air cargo and terminal development.
"Through this investment, we're preparing Invercargill for the growth generated by direct flights to and from Auckland," Jones, a New Zealand First MP, said on Thursday.
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"It will make it easier for Southland-based industries, especially aquaculture, to export their perishable goods to key domestic and international markets."
The direct flights will be operated by Air New Zealand, which is 52 percent owned by the Government. The airline announced plans for direct flights in December, and said they would begin in August.
The national carrier said it would operate a trial service at first, using an Airbus A320 jet aircraft, five times a week. It would be New Zealand's longest domestic flight.
Air New Zealand head of regional affairs Reuben Levermore said in December the Southland community had told the company that a direct flight service was "important".
Jones said the flights could help Southland businesses grow, and labelled the Government funding a "no-brainer".
"These businesses could otherwise leave the region in search of capital. This investment network will help to drive innovation, business growth and job creation in the region."
PGF's other Southland funding:
- $550,000 to establish a business start-up investment network
- $593,481 for a pilot scheme (Oreti) that uses tools to capture clean water and uses it to replenish groundwater resources
- $100,000 for the Stewart Island / Rakiura economic development plan
The funding for Invercargill Airport will help to deliver facilities in managing increased freight volumes and specialised loading, as well as the introduction of security screening for baggage and passengers.
It will also fund parking areas suitable for A320 and A321 aircraft, enhanced physical security arrangements, and increased emergency response support.
Last year the Government announced $2 million from the PGF would go towards boosting Southland, with around half going towards an inner city development project in Invercargill.
Jones has expressed concern about New Zealand's regional airports struggling to get by because of underfunding.
The PGF has already helped fund work at three airports, including $5.5 million at Gisborne Airport, $1.75 million at Bay of Islands Airport, and $2 million at Westport's airport.
The New Zealand Airports Association told Newshub last week that 10 to 12 regional airports are struggling financially.
Jones came under fire earlier this year when it as revealed he put forward an unnamed private airline to receive an investment from the PGF that it didn't even ask for, and against Treasury advice.
The minister had a row last year with Air New Zealand for cancelling regional routes, saying it was far too focused on Auckland. He later called for heads to roll after the airline's board voiced concern about political interference.
The Government's stake in Air New Zealand was acquired under former Prime Minister Helen Clark. Its share was reduced from 73 percent under former Prime Minister John Key.