Investigating aviation subsidy scheme's impact on domestic aviation during the post-lockdown period: a case study of New Zealand

Article

Wu, Hanjun, Tsui, Kan Wai Hong, Ngo, Thanh and Lin, Yi-Hsin. 2025. "Investigating aviation subsidy scheme's impact on domestic aviation during the post-lockdown period: a case study of New Zealand." Case Studies on Transport Policy. 20. https://doi.org/10.1016/j.cstp.2025.101405
Article Title

Investigating aviation subsidy scheme's impact on domestic aviation during the post-lockdown period: a case study of New Zealand

ERA Journal ID200266
Article CategoryArticle
AuthorsWu, Hanjun, Tsui, Kan Wai Hong, Ngo, Thanh and Lin, Yi-Hsin
EditorsHong, S. J
Journal TitleCase Studies on Transport Policy
Journal Citation20
Article Number101405
Number of Pages10
Year2025
PublisherElsevier
Place of PublicationNetherlands
ISSN2213-624X
2213-6258
Digital Object Identifier (DOI)https://doi.org/10.1016/j.cstp.2025.101405
Web Address (URL)https://www.sciencedirect.com/science/article/pii/S2213624X25000422
Abstract

This study investigates the impact of aviation subsidies on domestic aviation markets during the COVID-19 pandemic, focusing on New Zealand's small-scale regional aviation sector. It examines the effects of the Essential Transport Connectivity (ETC) scheme, the country’s first-ever aviation subsidy initiative, using panel data regression models. The findings provide clear evidence that airline subsidies significantly boosted regional air passenger flows, while airport subsidies had limited influence. This research is novel and valuable as it empirically evaluates the effectiveness of the ETC scheme in supporting domestic aviation during the post-lockdown period, an area that has received little attention in prior studies. It contributes to the growing body of literature on COVID-19-related aviation policies, specifically their role in sustaining regional aviation markets. While the study focuses on New Zealand's unique context, its implications extend to policymakers globally, offering insights for designing effective aviation subsidy policies that promote regional aviation recovery and growth in the post-pandemic era.

KeywordsRegional aviation subsidies; Post-lockdown period; Regional air passenger flows; Aviation market growth; Post-lockdown period
Contains Sensitive ContentDoes not contain sensitive content
ANZSRC Field of Research 2020350999. Transportation, logistics and supply chains not elsewhere classified
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Byline AffiliationsMassey University, New Zealand
School of Business
National Taichung University of Science and Technology, Taiwan
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