The Otago Southland Rescue Helicopter service will have a shortfall of about $2M going into the next financial year, as it seeks to renew vital air ambulance contracts.

HeliOtago director Graeme Gale told Otago Regional Council (ORC) on Thursday (September 25) its four-year contract with Health NZ/ACC would expire in October 2026, and there were no negotiations underway yet for its future.

ORC gave the Otago Southland Rescue Helicopter Trust $350,000 a year; the Invercargill Licencing Trust Foundation contributed $150,000, with funding also from community groups and individuals; and bequests had increased to $335,000.

Graeme said the government contract for air ambulance services in the South Island was split between HeliOtago and Garden City Helicopters in Christchurch, and the Southern operation was able to subsidise the funding shortfall from the other areas of his commercial flying business.

There are five helicopters based at the Taieri airbase and a further two in Queenstown, and the total missions over the past year increased from 2,057 to 2,165 - with hospital transfers (946) the highest, accidents 621, medical emergencies 490, and search and rescue 108.

New Instrument Flight Rules (IFR) routes have enabled the service “to go to places that I never thought possible before”, Graeme said.

He said the Otago operation has the most comprehensive low level IFR network in the country, and new routes enable pilots to cover areas such as near Campbell Island in the South, right through to Christchurch.

“We are flying in the middle of the night, in the dark and at low levels, in the valley systems and in bad weather.”

Graeme said the only days the helicopters were grounded was in bad fog or low freezing levels.

HeliOtago was in the process of ordering two new Airbus D3 helicopters from Europe at a cost of $22M each, making it one of the sophisticated air ambulance services in the country.

The service has also made its own specialised equipment such as stretchers to fit inside the choppers, and employed its own medics - no longer using St John’s.

Graeme said he was concerned about future funding, and the new technological advancements meant they now faced a major funding shortfall more than ever.

“It’s just so capital intensive now, we are going to be a major player, but there is no way five to 10 years ago we would be able to deliver that level of care.”

The 10 year air ambulance funding contract with the government will start in October 2026.