ER2nd.
8th Nov 2003, 11:16
Pacific Beat’s Sean Dorney reports
Island air services’ study panned
Australia's proposal to fund a study on rationalising Pacific Island airline services has been described as potentially a waste of time and money.
Most Pacific Island nations, even the tiniest ones, have national airlines. Only one of them, Fiji's Air Pacific, appears to be profitable.
But as Pacific Beat’s Sean Dorney reports, there is little enthusiasm in the region for what may seem the obvious solution - a single regional airline.
“One of the reasons why previous studies failed, we strongly believe, is because they were imposed on the region. It’s not something that the region demanded or asked for,” says George Faktaufon, Secretary General of the Association of South Pacific Airlines.
“The governments are saying over the years, ‘Look, we know that we are losing money, our airlines are losing money. We know that we are probably wasting a lot of our money proping up some of these airlines but unless someone can come and offer something better or something that's acceptable, we will continue to do this because air transport is so vital for our economic and social development'."
Apart from the Australian study, there's a regional initiative, the Pacific Islands Aviation Agreement, aimed at creating an open skies policy.
Support from New Zealand
That's generated suspicion despite an enthusiastic endorsement by New Zeland's Prime Minister, Helen Clark, when it was opened for signing at the end of the Pacific Islands Forum Leaders meeting in Auckland in August.
“New Zealand has taken an interest in this initiative from the beginning and supports the creation of a single and unified aviation market for all members of the Pacific Islands Forum,” Mrs. Clark says.
“So concluding the formal session of the Forum with this new co-operative initiative, I believe, sends a strong signal that the countries of the Pacific region are serious about finding new ways to work together.”
Too many idle planes
But only four of the fourteen island countries signed. The publisher of South Pacific Aviation, Robert Keith-Reid, does not believe there is any simple answer to the region's transport dilemma.
“Well, the problem is that the South Pacific is a very difficult area to operate in - not much business, long routes. One survey showed that at a time when there's about 12 or 13 Boeing 737 type jets being operated in the region, there's only enough business for three or four.
“The trouble is that almost all the island countries only want their aircraft at the weekends, basically to bear their tourists to them and take away last week's tourists, which means that for much of the rest of the week the aircraft are standing almost empty,” says the publisher.
Vulnerable to competition
But Mr Keith-Reid says the experiment of a single regional airline, Air Pacific, didn't work out. Fierce nationalism was one reason, but another was the pure economics of air travel.
“The countries which have these failing airlines, or barely viable airlines, were forced into the gigantic investment of one or two jets because all the international airlines that used to operate into the South Pacific in the 1980s began overflying them,” he says.
“Airlines like Fiji's Air Pacific also began to progressively withdraw from regional routes as it became more interested in the money-making long-haul routes to America, Asia, Australia and New Zealand.
“The whole focus had to be switched to the servicing of these very unviable routes by basically unviable countries operating unviable airlines,” says Mr. Keith-Reid.
Huge losses
A case in point, and one of the most recent airlines formed, is Air Kiribati. They seemed to be concerned that Air Nauru wouldn't keep delivering the service and so they went in to an aircraft on their own and that hasn't been a success.
“That was partly it,” he says. “There's been doubt about the future of Air Nauru for some time because there's doubt about the solvency of Nauru as a country. So the previous government went head-on and acquired a very expensive turbo-prop which the new government says the country can't afford to keep running.
“But the latest disaster, and it is a disaster, is Royal Tongan which, having lost several million dollars trying to operate an old Boeing jet, gave it away two years ago after losing lots of money, and then was required by the Tongan Government to hire a Boeing 757 jet.
“I'm told by the airline staff that the airline is losing about two million dollars Tongan a month, which is catastrophic in terms of the size of the Tongan economy,” Mr. Keith-Reid says.
Study superfluous?
George Faktaufon from the South Pacific Airlines Association says he's seen the terms of reference for the proposed study by Australia and they're the same as those for previous studies now gathering dust on shelves around the Pacific.
“We can tell them that many of these airlines will not be economically viable. You do not need a study to tell you that,” he says.
And on the current terms of reference it's probably just a waste of money and waste of time?
“I believe so. If the Australian study is going to go through the same path that previous studies have gone thorugh, then it will fail. It will not achieve what Australia wants it to do,” Mr. Faktaufon says.
04/11/2003
Island air services’ study panned
Australia's proposal to fund a study on rationalising Pacific Island airline services has been described as potentially a waste of time and money.
Most Pacific Island nations, even the tiniest ones, have national airlines. Only one of them, Fiji's Air Pacific, appears to be profitable.
But as Pacific Beat’s Sean Dorney reports, there is little enthusiasm in the region for what may seem the obvious solution - a single regional airline.
“One of the reasons why previous studies failed, we strongly believe, is because they were imposed on the region. It’s not something that the region demanded or asked for,” says George Faktaufon, Secretary General of the Association of South Pacific Airlines.
“The governments are saying over the years, ‘Look, we know that we are losing money, our airlines are losing money. We know that we are probably wasting a lot of our money proping up some of these airlines but unless someone can come and offer something better or something that's acceptable, we will continue to do this because air transport is so vital for our economic and social development'."
Apart from the Australian study, there's a regional initiative, the Pacific Islands Aviation Agreement, aimed at creating an open skies policy.
Support from New Zealand
That's generated suspicion despite an enthusiastic endorsement by New Zeland's Prime Minister, Helen Clark, when it was opened for signing at the end of the Pacific Islands Forum Leaders meeting in Auckland in August.
“New Zealand has taken an interest in this initiative from the beginning and supports the creation of a single and unified aviation market for all members of the Pacific Islands Forum,” Mrs. Clark says.
“So concluding the formal session of the Forum with this new co-operative initiative, I believe, sends a strong signal that the countries of the Pacific region are serious about finding new ways to work together.”
Too many idle planes
But only four of the fourteen island countries signed. The publisher of South Pacific Aviation, Robert Keith-Reid, does not believe there is any simple answer to the region's transport dilemma.
“Well, the problem is that the South Pacific is a very difficult area to operate in - not much business, long routes. One survey showed that at a time when there's about 12 or 13 Boeing 737 type jets being operated in the region, there's only enough business for three or four.
“The trouble is that almost all the island countries only want their aircraft at the weekends, basically to bear their tourists to them and take away last week's tourists, which means that for much of the rest of the week the aircraft are standing almost empty,” says the publisher.
Vulnerable to competition
But Mr Keith-Reid says the experiment of a single regional airline, Air Pacific, didn't work out. Fierce nationalism was one reason, but another was the pure economics of air travel.
“The countries which have these failing airlines, or barely viable airlines, were forced into the gigantic investment of one or two jets because all the international airlines that used to operate into the South Pacific in the 1980s began overflying them,” he says.
“Airlines like Fiji's Air Pacific also began to progressively withdraw from regional routes as it became more interested in the money-making long-haul routes to America, Asia, Australia and New Zealand.
“The whole focus had to be switched to the servicing of these very unviable routes by basically unviable countries operating unviable airlines,” says Mr. Keith-Reid.
Huge losses
A case in point, and one of the most recent airlines formed, is Air Kiribati. They seemed to be concerned that Air Nauru wouldn't keep delivering the service and so they went in to an aircraft on their own and that hasn't been a success.
“That was partly it,” he says. “There's been doubt about the future of Air Nauru for some time because there's doubt about the solvency of Nauru as a country. So the previous government went head-on and acquired a very expensive turbo-prop which the new government says the country can't afford to keep running.
“But the latest disaster, and it is a disaster, is Royal Tongan which, having lost several million dollars trying to operate an old Boeing jet, gave it away two years ago after losing lots of money, and then was required by the Tongan Government to hire a Boeing 757 jet.
“I'm told by the airline staff that the airline is losing about two million dollars Tongan a month, which is catastrophic in terms of the size of the Tongan economy,” Mr. Keith-Reid says.
Study superfluous?
George Faktaufon from the South Pacific Airlines Association says he's seen the terms of reference for the proposed study by Australia and they're the same as those for previous studies now gathering dust on shelves around the Pacific.
“We can tell them that many of these airlines will not be economically viable. You do not need a study to tell you that,” he says.
And on the current terms of reference it's probably just a waste of money and waste of time?
“I believe so. If the Australian study is going to go through the same path that previous studies have gone thorugh, then it will fail. It will not achieve what Australia wants it to do,” Mr. Faktaufon says.
04/11/2003