Mainland Air chief executive Phil Kean said he was training just 27 student pilots — pre-pandemic he was training 70.
Nearly all the Dunedin school’s students were from India and it was taking up to six weeks for visas to be processed — it had been even worse.
Mr Kean said he hoped his school would still be operating next year but it was "at risk" due to income being halved and "stiff competition" from other countries with shorter visa turnarounds.
Foreign students were "knocking on the door all the time but some just couldn’t get in", he said.
There was also a domestic pilot shortage at "crisis" level and a need for more to be trained with easy-access student loans, he said.
Aviation New Zealand chief executive Simon Wallace said the visa situation was "just ridiculous".
"Australia is processing applications in five days. We are in a global marketplace and need to compete."
To compound matters, some foreign students were not allowed to get a job while in New Zealand, which "impedes their ability to fund their pilot training", he said.
Immigration New Zealand had been talking to Aviation New Zealand about the problems, but there had been "no progress", Mr Wallace said.
There was also an urgent need to train more New Zealanders to be commercial pilots, he said. Some pilots had left the industry during the pandemic, yet demand for pilots was exceeding pre-Covid levels.
The biggest barrier to New Zealanders training to fly was the $70,000 cap on their student loan, when the cost of training had risen to $120,000, he said.
"It shouldn’t just be for the elite.
"We have been advocating to successive governments about the need to increase the borrowing allowance.
"It is not valuing the industry and there should be more government investment in its training and development. "
Wanaka Helicopters academic co-ordinator Brian Paavo said he took few international students, but visa delays created a "constant battle" for other flight schools running on fine margins which were reliant on students from Asia.
Mr Paavo said foreign student income also helped local economies.
"It is not unusual for a student to bring upwards of $30,000 to the economy in addition to their flight training costs, so there is economic value in supporting the training sector," he said.
"A lot of people don’t realise how much flying happens in New Zealand," Mr Paavo said.
The challenges were being seen in the region but needed to be "tackled nationally" to ensure schools could continue to train the domestic pilots needed, he said.
