Cost of helicopter ambulance callouts to increase almost 65% for third party customers

The cost of calling out an air ambulance helicopter is skyrocketing to over $13,000 an hour - and not because of Iran war fuel price rises.

The hike of almost 65 percent from the current $8200 an hour kicks in from Friday.

"The cost increase for third-party customers does not include the recent fuel price increase as it was calculated prior to the rise in jet fuel costs," said Health New Zealand and ACC which ordered the rate hike.

The main third-party customers were police and the Rescue Coordination Centre which used the helicopters on almost 3000 operations a year.

The two agencies have been approached for comment, with RNZ asking if they might have to cut back on using the aircraft.

Civil Defence callouts could also cost more, for councils or NEMA.

Health NZ and ACC, which separately fund about 12,000 medical flights and hospital transfers a year, paid for jet fuel for the air ambulances directly, and said that cost had risen due to the Iran war by over $500,000 a month.

"As joint funders of air ambulance services, Health New Zealand and ACC will keep reviewing service costs annually to support service sustainability," they told RNZ in a statement.

Some of the cost of medical flights has always been met by fundraising for the 23 helicopters by various trusts.

On the search-and-rescue or SAR side, the increase could cost the RCC another $8m a year based on 1400 flight hours in 2024.

Northern Rescue which covers Auckland, Northland and Coromandel said it was not in a position to comment, other than that it was "committed to serving our community and continuing to provide a high-quality, reliable aeromedical service when tasked" and that it was "important to note that we do not control the coordination or dispatch of aircraft".

The NZ Helicopter Association said the rise would help but still left a gap.

"The full amount will still not cover the operating costs for the air ambulance," association chair Scott McKenzie said.

"They'll still need to do a significant amount of fundraising to cover some of their training costs and for purchasing new equipment."

A big driver was the cost of spare parts in some cases up 80 percent or more since the pandemic - he cited a major part that used to cost $300,000 and was now over a million.

As for higher fuel prices, "This price increase was coming before the fuel price increase hit the country - there's still a requirement that money will be covered somewhere," McKenzie said on Thursday.

"In one week, we had an 83 cent per litre increase in the price of Jet A1, which all of the aircraft operate."

HNZ and ACC said the $8200 an hour rate set in 2024 was not covering costs. The rates were the minimum they set that the country's three rescue chopper providers had to charge.

"This earlier rate was a partial cost recovery that did not fully cover fleet renewal, capability uplift, and long-term sustainability," they said.

"In addition, service delivery costs have since increased significantly because of fleet modernisation, pilot upskilling, and inflation."

"As a result, we have advised air ambulance providers that from May 1, 2026, the full hourly cost of $13,450 must be recovered from third-party customers.

"This approach ensures that third-party customers are fully funding costs generated and supports the financial sustainability of the air ambulance service for patients with urgent health or injury needs."

The government in the last two years has spent about $27m replacing 16 of the older air ambulance helicopters.

Councils and the National Emergency Management Agency might also be exposed to the latest hourly rate hike if they have to call on the aircraft, as happened in Cyclone Gabrielle.

After the storm, some councils struggled to get reimbursed for aviation and other expenses.

SAR operations sometimes use cheaper regular helicopters but these are usually not as large or well equipped, or able to fly in bad weather or at night so readily.

Cost recovery and who pays for what around air ambulances and other rescue aviation responses has been a factor causing headaches for NZ Search and Rescue, Police, the RCC, ambulance providers, HNZ and Fire and Emergency (FENZ) for at least several years.

In 2023 a FENZ internal email referred to legislative complications and "our logistical problems and double/tripling up of same resource request".

HNZ stepped in last year with FENZ to remind it was not allowed to directly order up an air ambulance helicopter to transport its cliff rescue crews, even if they did not have another option to get to a rescue over an hour by road away.

Just last month the RCC was given the job of developing a new SAR aviation coordination system to resolve the longstanding problems.

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