Oil and Isolation: Global public transit?

Maybe the governments of the world should look at global air traffic and see it more as a public transit system than as a collection of competing private carriers doing what is in their own best interest?

Bloomberg reports NZ is seeing rising tourism from Australia (17%) while overall visitor spending growth has slowed to 2.7%, about half the previous year. Based on the figures in the report, that is a loss to NZ of about $162 million, thanks to a higher price for aviation fuel. The government will have seen the tax take reduced by a proportion of that. Let's use the GST rate and call it $18 million, though it will be much higher when income tax from wages and profits in the tourist industry are also taken into account.

Maybe it would make sense to use $15 million (for example) to allocate a tax credit to fuel for any airline - foreign or domestic - flying to and from New Zealand? Treat it like a public transit subsidy to encourage ridership. In order to claim it, travel reductions would have to be measurable and in line with the cost reduction. The amount of fuel attracting the credit would be equal to the number of kilometres flown on the leg to / from NZ. We don't want fuel tankers arriving half-full at foreign ports with excess fuel funded by our tax credit.

Look at air links to and from New Zealand as key infrastructure upon which a large chunk of our economy ($6.16 billion from overseas) rests. It seems a terrible shame to allow ourselves to be isolated globally and also let a large chuck of our economy strangle when a relatively trifling sum would continue to make it affordable for more people to travel here and from here. Meanwhile, maybe the NZ government could look at alternative fuels for long range air craft. There could be money in that i the years ahead.

I'm not usually a fan of subsidies, but for a small country as isolated as we are, I don't think we should allow ourselves to confined to quarters and effectively placed off-limits to others by the rising price of oil. It's an isue we will face on every transport front. For the sake of $20 or $30 million worth of fuel costs we might lose $400 million or more in tourism from overseas. Social impact aside, that alone represents a net economic loss to New Zealand greater than the cost of the fuel.

Air links to and from New Zealand could, and perhaps should, be seen as loss leaders to attract visitors and allow more of us to remain an active part of the wider world. We would have no objections to other countries reciprocating in kind.

Like the printer model: sell the printers for cheap and make money on the consumables.

While we're at it, maybe we could look at building sailing ships with battery-backed motors charged by wind and/or wave power to carry cargo with zero carbon emissions. We may need those too in the years ahead.