21 Feb 2012

Cook Islands to commit to hefty increase in Air New Zealand guarantee

12:26 pm on 21 February 2012

A 3.8 million US dollar increase in the cost of guaranteeing Air New Zealand flights to Sydney and Los Angeles is expected to push the Cook Islands into a budget deficit this year.

The government had been eyeing a surplus of more than two million US dollars but the Minister for Finance and Economic Management, Mark Brown, says the cost of the guarantee has jumped by more than 50 percent.

The guarantee, under which the Cook Islands government commits to cover any shortfall on the flights, is now ten and a half million dollars.

Mr Brown says the government would be sticking with the flight guarantee for the time being, ensuring that direct flights linking Rarotonga with Sydney and Los Angeles continue to operate.

He says it would be irresponsible to cancel the flights despite the cost increase, especially with the high season for tourism in the Cook Islands now approaching.