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Kiwi Regional Airlines considers crowdfunding $2 mln for new plane

Monday 7th March 2016

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Kiwi Regional Airlines is considering trying to raise $2 million to buy a second plane through crowdfunding.

The airline currently flies from Dunedin to Hamilton, Nelson to Hamilton, Dunedin to Nelson and Nelson to Tauranga. It is due to begin servicing Christchurch in May. A route between Dunedin and Queenstown was abandoned shortly after the airline was launched.  

Chief Executive Ewan Wilson told Mediaworks' Paul Henry programme that they were "seriously thinking about" a crowdfunding initiative. Wilson said a second plane was needed to cover both planned and unplanned engineering work. The plane would not be used to add more routes.

“We’ve identified a very lucrative freight and passenger charter market so what we’re not doing with the second aeroplane is wanting to add any more capacity...We believe there is considerable capacity for us to develop in the charter area.” Wilson said.

No website has been set up to handle the crowdfunding idea, which Wilson said was currently only a "discussion point". He said the rules had been changed and the company was keen to have New Zealand backers.

“The Financial Markets Authority changed the legislation a year ago and New Zealand has in fact led the world enabling small investors via a crowdfunding platform to be involved with equity in companies. So for us it’s not the $2 million dollars, $2 million dollars 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."

However potential investors were also warned about the industry, which is very competitive. Wilson told Henry that backers should consider their investment carefully: “Don’t go into it lightly, it’s the most risky industry there is.” 

Wilson previously ran Kiwi Travel International Airlines, which failed in the mid 1990s.

In December, 2 Cheap Cars, which held a stake in Kiwi Regional Airlines, said it was looking to sell its shares, saying it "never intended to be a long-term investor". The nationwide chain of auto yards had initially owned 23 percent of the airline, but that shareholding has been diluted repeatedly when the company issued more shares. Nicole and Guy Domett, former directors and shareholders of the New Zealand School of Tourism, each individually own 33 percent of the airline, while Ewan Wilson owns just over 20 percent.

BusinessDesk.co.nz



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