Air New Zealand (NZ, Auckland Int'l) is considering merging its two regional subsidiaries into its mainline carrier in an effort to cut costs.

In a written statement to Stuff, Air New Zealand said it was exploring whether there were efficiencies that could be gained by integrating its Air Nelson (RLK, Nelson) and Mount Cook Airline (NZM, Christchurch) units with its jet operation.

"To be clear there is no plan to close these regional turbo prop airlines, or to stop flying to any of our current regional destinations, or to stop operating the Q300 and Avions de Transport Régional turboprop fleets," it said. "We remain committed to growing our turbo prop regional services."

At present, Air Nelson operates twenty-three Dash 8-300s while Mount Cook Airline operates seven ATR72-500s and twenty-one -600s. Both ply the domestic New Zealand market focusing on connecting Auckland Int'l, Wellington, and Christchurch with smaller towns and cities. Air New Zealand closed another of its regional subsidiaries, Eagle Airways (Hamilton), in early 2016 citing losses incurred via its use of smaller Beech 1900Ds.

Citing weaker global demand, Air New Zealand announced last week that it would contain costs primarily through fleet deferrals.