The New Zealand Government will offer regional airlines between NZ$300,000 and NZ$1.2 million worth of working capital grants to offset rising jet fuel prices and support remote communities.
“These grants for day-to-day costs such as fuel and wages are being provided with an expectation the airlines will maintain their current service levels,” Associate Transport Minister James Meager said on 5 October.
Jet fuel prices have created problems for regional operations since March – when the US and Israel attacked Iran – Regional Development Minister Shane Jones said. They spiked at the start of the Iran war because of maritime disruptions around the Strait of Hormuz, and have not declined.
Air New Zealand bought jet fuel for $111/barrel, on average, in the 2025-26 financial year, up from $88/barrel in 2024-25, it told investors on 28 September. The company’s jet fuel costs averaged $150/barrel in late September, it added.
Air New Zealand expects its jet fuel and Brent crude costs to average $130/barrel and $80/barrel, respectively, in 2027, the company said. But its jet fuel cost forecast includes its expected carbon, financial hedging, and sustainable aviation fuel costs, it added.
Brent crude oil futures last traded at $101.55/barrel on 6 October, up from $97.16/barrel on 7 September. Oil prices rose in mid-September because of escalating violence across the Middle East.
Brent crude futures traded at $104.61/barrel on 11 September, up from $101.21/barrel on 9 September, largely because Saudi Arabian officials closed the East-West pipeline over drone attacks on 10 September.
On 29 September, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman Al Saud met with Australian Energy Minister Chris Bowen to discuss oil infrastructure attacks, according to Bowen.
“The attacks on Saudi Arabia have made the biggest oil crisis in history even worse,” Bowen said. “[The Australian Government] will continue to work closely with all our key partners to ensure Australia’s fuel security,” Bowen added.
By Avinash Govind