CURRENT AIRLINE NEWS- TONGA
When the Ministry of Civil Aviation announced on Tuesday, August 3, that by August 15 only one airline will be operating Tonga's domestic air service, it sparked off another national economic and political turmoil.
For such a policy blatantly contradicts Tonga's economic reform directions, and is complicated by the involvement of the Prince Regent, Crown Prince Tupouto'a, in the airline business.
Currently the domestic route is serviced by two local airlines, the Peau 'o Vava'u Airways, and the FluNiu Airlines, who stepped in to fill the gap left by the demise of Royal Tongan Airlines only two months ago.
Economically, the sudden announcement that only one will be allowed to continue, looks like a two-steps forward and four-steps backward move by government, which since 2002 has embarked on a multi-million pa'anga economic reform program, with emphasis on the development of the private sector and the creation of a level playing field for entrepreneurial competition.
Under this economic reform program we have had some ear-bashing during the past years on the concept of Open Sky Policy and the importance of encouraging competition in the airline Industry, and allowing market forces to dictate who should be the dominant player. For government to now step in and dictate who should and should not be in business is definitely a destabilising move against an economic reform program that is still desperately trying to find its rhythm.
It also fails to recognise that it takes an enormous amount of money to start an airline operation, whether it is a wet lease or not, and ignores the commitment both airlines have made in trying to rescue the country and particularly the tourist industry from economic disaster, when they re-linked the outer islands to the capital and its international airport. The airlines made extra expenditures to meet the high standards demanded by the Civil Aviation authority, but now this week's announcement can only undermine confidence in the new services and impact on their bookings.
The Chief Executive of FlyNiu Airlines, 'Atu Finau said that the Ministry of Civil Aviation's one-airline policy has completely over-shadowed what it had officially stated when they were issued with a licence to operate on June 16, only six weeks ago.
'Atu said that they were officially informed that government was working on a Domestic Civil Aviation Policy to be introduced on November 9, and "definitely not August 15." He said that when they were issued with a licence they confirmed their Wet Leasing of a DASH 8-200 aircraft from Air National, New Zealand, and since then they have been investing their money and working on expanding their service. They have been training flight attendants and pilots and will soon increase their staff from 32 when their second aircraft will arrive soon from Auckland to service the outer islands of 'Eua and the Niuas. A second aircraft will also enable them to increase the frequency of their service to Ha'apai.
'Atu said that within this short time they have captured 75.5% of the travelling market between Tongatapu and Vava'u and Ha'apai.
The FlyNiu is flying on average twice to Vava'u and once daily to Ha'apai. 'Atu said that their strength is that they offer a fast, comfortable and a reliable service with an airfare of $299 return to Vava'u and $179 returned to Ha'apai.
The second operator on the same route Peau 'o Vava'u, using a DC3 aircraft also has a plan for further expansion. The King told the FWC conference in Vava'u in June that the Crown Prince Tupouto'a and Joseph Ramanlal, (who hold shares in Peau 'o Vava'u) had reached a deal to buy a Twin Otter from an aircraft manufacturer in China, and because the Chinese want to set up a base in the Pacific Islands they offered to give the Crown Prince another Twin Otter as a present. The King said that the Twin Otter was the appropriate type of aircraft for 'Eua and the Niuas.
At the moment the Peau 'o Vava'u Airways is flying twice daily to Vava'u from Monday to Saturday, and once a day to Ha'apai.
The Project Manager of the Peau 'o Vava'u Airways, Mosikaka Moengangongo did not want to make a comment on the government's one-airline policy, but she said that it was important to try and comply with government's requirements, and that they are optimistic that they will be selected to be the sole domestic air service provider for Tonga.
Headache
The political implication of the government's one-airline policy and their intrusion into deciding who should be given the sole right to fly the route is an unnecessary headache that government has sought for itself.
The decision making body has tied up itself in a knot. The final decision will be made by the Prime Minister Prince 'Ulukalala Lavaka Ata, who is also the Minister of Civil Aviation. His decision will be based on the advice of a Ministerial Advisory Committee, which is made up of a representative from the Ministry of Civil Aviation, the regulator, the Ministry of Finance and from Central Planning.
It would be unprecedented for the Prime not to favour the Peau 'o Vava'u Airway, the airline belonging to his brother, the Prince Recent, Crown Prince Tupouto'a, and award him the licence to be the sole operator of the domestic air service.
But wouldn't it be so much easier for government to allow fair competition and then let the market force decide who should be the dominant operator?
The government's position on its policy on Domestic Civil Aviation Airline Operations was clearly spelled out by the Secretary for Civil Aviation Mapa Faletau on August 3 when he said that prior to the demise of the Royal Tongan Airlines there was no interest by anyone in providing a high level of service for the people of Tonga. "But the excitement was suddenly felt when the demise of RTA took place and people said that this is a chance for us to make a lot of money. The reality is there is no money in this, what there is though is the requirement by the people of Tonga and for government to give them a level of service, and this is really what this policy at the end of the day is trying to achieve."
Mapa went on to say there was no compensation due because "all the two operators have done is wet lease from Air National and Pion Air of New Zealand. There is no investment, what they have done is use everything that either RTA had or government had and used it. But what the two operators don't like is the fact that there is a lot of government control."
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Extracted from Matangi Tonga news.