Cover Story
'Open Skies' to Close Island Airlines?
Industry Officials Worried by Forum Plan
Pacific Island regional airlines are alarmed about moves toward a limited “open skies” common civil aviation market for their region. The Association of South Pacific Airlines (ASPA) says the plan for liberalizing the aviation market threatens some of its 16 members who could be driven out of business by foreign airlines disinterested in subsidizing the vital economic and social needs of isolated island states. ASPA says the region’s aviation ministers and aviation officials at the Suva-headquartered Pacific Forum Secretariat are failing to adequately consult airlines about the plan, which will go probably to the 2002 annual Forum heads of government meeting for approval.
Aviation ministers will discuss a draft multilateral air services agreement (MASA) at a meeting at Brisbane, Australia, in September. ASPA Chairman Richard Gates, who is chief executive of Samoa’s Polynesian Airlines, says, “We have a responsibility to ensure that the viability of regional carriers continues. Any change in the regulatory environment has got to be one that lets the airlines develop and strengthen themselves without being buffeted by more events that they can’t control.”
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The Forum’s 14 island members have 67 bilateral air service agreements. Twenty five cover island country to island country flights, 16 are with Australia and New Zealand and 26 with the rest of the world.
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Forum aviation officials say this proliferation of bilateral agreements is a brake on multi-destination tourism, investment and industry development. Pacific Island aviation ministers agreed to move towards a regional air service agreement in May 1998.
In September 1999 they agreed to move towards a single aviation market, with the drafting of a multilateral agreement to be organised by the Forum Secretariat. Claims that the new agreement would see regional carriers driven out of business by bigger foreign airlines have “no basis,” according to Forum officials. They say that the market would be restricted to airlines designated by Forum member island countries.
But Gates said that regional carriers “have got to learn before we can run” and that “considerable breathing space” is needed to allow them to become stronger. “We are not saying we are against open skies. We are saying that it has to be at a pace that small developing countries can absorb.” Gates said five to 10 years was the respite needed.
Nearly all the region’s airlines are partly or wholly government owned. Almost all have a record of losing money badly. In recent years some have begun to break even or make small profits.
Most island airlines were set up because from the late 1970s major foreign airlines began over-flying island destinations when non-stop long-range flights became more profitable for them.
Adds Gates: “The question we need to ask ourselves is: can we afford competition when we open the skies, even to just amongst ourselves? How important is aviation to our fragile economies? And if it is, are we prepared to give away control of our aviation sector to outsiders?”
Photo: TahitiPress •ASPA airlines: Aircalin, Air Caledonie, Air Fiji, Air Kiribati, Air Marshall Islands, Air Niugini, Air Pacific, Air Tahiti, Air Tahiti Nui, Air Rarotonga, Air Vanuatu, Polynesian Airlines, Samoa Air, Solomon Airlines.
