Aviation
A Private Airline that Works
Secret Behind The Success Of Air Rarotonga
It started with a Cessna and a cash box. Now, Air Rarotonga is operating four planes, including a wholly owned Saab 340, with plans to add an additional Saab 340 in 2003. This significant domestic airline has also put international links on its agenda, looking at regular service to Samoa and Tahiti, and charters to Niue.
“We were more of a tour operator than an airline when we started,” says managing director Ewan Smith, a pilot and an engineer, who helped to start the private airline 24 years ago. He is now one of four owners.
- ADVERTISEMENT -
 |
|
|
Today, tourism is a happening operation in the Cook Islands, with about 75,000 visitor arrivals in 2001 and an expected increase to 100,000 in the next several years. But in the late 1970s, most international visitors hadn’t heard of the Cook Islands, much less figured out how to get there or what to do once they arrived. To attract overseas visitors, Air Rarotonga created Island Hopper Vacations as an in-house tour agency, which offered package tours to various outer atolls in the Cook Islands. Air Rarotonga’s secret to success?
“We were two-thirds tour operator and one-third airline,” says Smith, who wears the additional hat of president of the country’s Chamber of Commerce. Air Rarotonga had to put the country on the map to survive economically. “We provided total inbound handling for European and United States wholesalers.” The travel agency is now a separate business, lifting the tour load off the airline.
The airline’s focus on product development has led to Aitutaki Atoll becoming a major destination. Aitutaki, an atoll 50 minutes to the north of Rarotonga by air, now caters to 20 percent of all visitors. The airline provides daily flights to the atoll, making access easy for visitors who want to add a day or two on a remote island to their itinerary. Tourists also visit several of the other close by atolls, while travelers to northern Manihiki, Penrhyn and Pukapuka tend to be local. About half of the visitors to the Cooks are from England and North America, while the balance are from Australia and New Zealand.
From an island group where two-thirds of its gross domestic product was based on foreign aid and remittances from Cook Islanders living overseas, the Cooks economy is now heavily dependent on the tourist dollar. Of its $175 million GDP, about $105 million is from tourism and another $10 million from the pearl industry. “Private sector-led growth is really happening here,” Smith says.
Unlike government-supported airlines in neighboring countries, such as Polynesian Air and Air Nauru, Air Rarotonga has never received government subsidies. Of the 13 pilots flying for the airline, 12 are Cook Islanders. “All but one of our licensed engineers is local,” says Smith. Being a one-stop shop for tour packages, reinvesting money earned to grow with the market, and maintaining a solid technical foundation, are the three items at the top of Smith’s checklist for why the airline is succeeding.
