Tourism
Air Calédonie On The Defensive
Tough times in the last two years have forced Air Calédonie, the domestic airline, to take defensive measures. The company, which employs 228 people, found itself in the red when fuel prices increased in 2000 and the value of the U.S. dollar strengthened against the Pacific franc (CFP). Insurance premiums also escalated after the September 11 attacks.
“Before the insurance hike, we paid 38 million CFP (US$280,000) in insurance. Now we pay between 130 million to 160 million CFP (US$1 million),” says Olivier Razavet, Air Calédonie board chairman. Another significant cost was the investment needed to comply with European safety laws by January 2000 since its French connection means New Caledonia has to conform to European legislation.
- ADVERTISEMENT -
To counter the effects of these factors, the airline took action including stopping flights that were incurring the biggest losses and introducing a surcharge of 1000 CFP (US$7) on a return fare. “The measures we have established will enable us to stabilise in the 2002/03 fiscal year,” says Razavet.
Another negative factor, linked to the inadequate international airline services, was the drop in tourists numbers. Although the company’s main client source is local traffic, mainly Loyalty Islanders, tourists account for 27 percent of its passengers.
It’s counting on the purchase of two new planes by New Caledonia’s international airline, Air Calin, to increase passenger numbers in 2003, a factor that has so far prevented it from resorting to drastic social measures such as cutting jobs.
