Aviation
How Kiribati's ATR72 Plan Could Backfire
Airline rivalries rearing up as potential disasters
National airline rivalries and ambitions are rearing up as potential financial disasters for at least three small Pacific Islands countries.
During the Pacific Islands Forum summit meeting in Suva last August countries of the Small Islands States group met between themselves and, amongst other matters, said that a Central Pacific regional airline was needed to overcome their pressing international air service needs.
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The Central Pacific’s isolation, distances, limited tourism traffic and small populations make the region difficult for commercial airlines to operate in profitably.
Now Kiribati is preparing to fly head-on against Air Nauru, which operates to it from Nauru and Fiji with its sole Boeing 737 jet.
A leased ATR72 dressed in the colours of the government-owned Air Kiribati has sat at Bonriki Airport, Tarawa, since July, awaiting international civil aviation clearances to operate passenger flights to Fiji, the Marshall Islands and Tuvalu.
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Islands Business understands the aircraft’s entry to service has hit several bad snags, including Kiribati’s lack of civil aviation administration infrastructure needed for the certification of flights.
Efforts were being made to engage a resident director of civil aviation and other officials so that flights could be operated legally, Islands Business was told by a well-placed source.
Leased through the aircraft’s French manufacturer/owner, the ATR came with a crew and an engineer, and is reported to be costing the government US$120,000 a month.
The annual cost of operating the aircraft is estimated at A$3 million, Islands Business was told, with the government prepared to accept an operating loss as a social service while trying to narrow the deficit as much as possible by running commercial flights.
A senior Kiribati government official told Islands Business the Kiribati Government was determined to accept the heavy economic burden of the ATR72 partly as a means of maintaining air links with Christmas Islands, the largest of the Line Islands, 3000 kilometres east of Tarawa, and also to end Kiribati’s dependence for air services on Air Nauru.
Other obstacles lie in the way of achieving these objectives. The ATR72 is said to be unable to comply with ETOPS rules for flights to Christmas Islands since the distance of a one-way flight exceeds the legal limit by about 200 kilometres.
Another difficulty is landing rights in a region in which Kiribati has little opportunity for operating the aircraft on scheduled commercial flights beyond the Marshall Islands, Nauru, Tuvalu and Fiji.
Tuvalu, anxious to protect Air Fiji in which it is a substantial shareholder, would not like Air Kiribati to carry traffic picked up in Fiji and Tuvalu on the Fiji/Tuvalu sector of flights between Fiji and Kiribati. And Fiji might not be happy about granting the Kiribati airline unrestricted rights at Nadi and Nausori (Suva) airports.
An Air Kiribati service to Fiji would also be bound to have an impact on Air Nauru’s present Fiji/Kiribati service.
In September, Air Nauru said it hoped to develop a Brisbane-Nauru-Majuro-Tarawa-Nadi service.
Its regional manager, John Goulding, went to Majuro to discuss the proposal with the Marshall Islands government and the government-owned Air Marshall Islands, another airline with a history of bad losses.
He said the airline is keen to launch the service but had hurdles to overcome.
Goulding said the Marshall Islands President Kessai Note and Air Marshall Islands had expressed support for Air Nauru’s proposal.
The conflict with Air Nauru that Kiribati’s ATR72 plan appears about to cause brings the long debated Central Pacific regional airline to the fore once again.
At past meetings Nauru, the Marshall Islands, the Federated States of Micronesia and Kiribati have discussed the feasibility of operating a sub-regional Central Pacific airline tailored to their needs.
Nauru campaigned strongly to have Air Nauru designated as the regional carrier and said it would obtain a second Boeing 737 jet for the purpose as its present lone aircraft is operated to the limit of its operational capacity.
Air Marshall Islands also looked at operating regionally with Dornier 328s. But it subsequently ran into serious financial difficulties. Its regional flights are restricted to Tarawa and sometimes Nauru with small Dornier 228s. To date the Central Pacific airline proposition has got nowhere.
The government-owned Royal Tongan Airlines has set November 27 for the opening of services to Auckland, Sydney and Honolulu with a 166-seater Boeing 757 jet, leased from Royal Brunei Airlines for five years.
This move comes after Royal Tongan Airlines’ bad experience with a small Boeing 737-200 it ran on daily flights to Auckland.
It got rid of the jet after piling up losses reported to total T$11 million in two years. It reverted to a seat-sharing arrangement with Air New Zealand for the Tonga-Auckland service.
Now, Royal Tongan Airlines intends to fly six days a week to Auckland and weekly to Sydney and Honolulu.
Airline industry observers told Islands Business they had grave doubts about Royal Tongan’s ability to work up enough business to make a profit.
