Kiwi Regional Airlines plans to crowdfund $2 million for new plane

 

 Kiwi Regional Airlines plans to crowdfund for a second Saab 340 aircraft.

Kiwi Regional Airlines plans to raise up to $2 million through crowdfunding to buy a second aircraft.

The new aircraft would be a Saab 340 QC used for passenger and freight charters and as a backup for maintenance of its existing aircraft Saab 340A.

Last month the Hamilton airline cancelled flights after grounding the 34-seater aircraft for unscheduled maintenance.

While the Saab was out of action Kiwi Regional called in Air Chathams to run the service using its 50-seat Convair 580.

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The planned new aircraft would not be used to add capacity or new destinations.

Kiwi Regional launched in November and flies Hamilton, Nelson, Dunedin, Christchurch and Tauranga routes.

It cancelled a Dunedin-Queenstown service less than a month after launching.

Crowdfunding requires members of the public to donate money towards a project or business.

Some platforms allow pledgers to claim a stake in the project or company if the campaign successfully reaches its funding target.

Kiwi Regional chief executive Ewan Wilson said the fundraiser would be an equity crowdfunding campaign, meaning if the campaign reaches its target, pledgers would become shareholders.

No crowdfunding platform had been chosen.

"I find the idea of a community of New Zealand shareholders being a part of Kiwi Regional Airlines quite exciting," Wilson said.

There are eight crowdfunding platforms in New Zealand licensed by the Financial Markets Authority to let businesses sell shares to the public through their website

Wilson said having only one aircraft meant maintenance could be costly.

"When the aircraft breaks down we have to hire another one to be able to provide good customer service, that can be an expensive process to have only one airplane."

Vehicle importer and retailer 2 Cheap Cars originally owned almost a quarter of the airline but that was diluted as Kiwi Regional issued more shares.

2 Cheap Cars sold its remaining 10.4 per cent share in the airline to Andrew and Anne King of Hamilton.

King's investments include Kings Finance and Kings Cars. He is not a Kiwi Regional director or part of the airline's management.

More to come.

 - Stuff

JOHN ANTHONY AND KELSEY WILKIE