Aviation
Polynesian's Niue Service Doing Well
Airline wants to be ‘significant regional carrier’
Polynesian Airlines chief executive John Fitzgerald aims to position the airline as a “significant regional carrier” serving mainly Samoa.
The service will cater for “both VFR and tourist demand, but also generate and satisfy traffic demands intra-regionally and to/from our major tourist markets,” Fitzgerald said.
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It’s a long-term plan and one that the new Polynesian Airlines boss intends to see through.
One service doing particularly well is the Polynesian Airlines’ Auckland/Niue service. Two flights now operate via Niue, the southbound Apia-Auckland on Monday and the Friday’s northbound Auckland-Apia service.
“Both the Niue government and Polynesian Airlines have been exceptionally pleased with the traffic that has been generated as a result of the services that commenced late last year.
“We are closely monitoring that traffic and should it be warranted we will increase the allocation of seats that are made available on those flights for passengers bound for Niue and those leaving Niue.
“If traffic increases further we will certainly look at increasing the frequency of our service through Niue.”
Fitzgerald replaces former chief executive Richard Gates, who resigned after eight years at the helm of the Samoa government-owned airline.
Fitzgerald took up the post on February 1. Previously Polynesian’s general manager finance and administration, he often assumed the CEO role when required.
Meanwhile, the twice-weekly flights to Niue is the boost that Niue has been waiting for and director of Niue Tourism Ida Talagi-Hekesi is “very pleased” with the results adding that the task now is more on follow-through.
Hekesi said: “Niue will be introducing a quota system on the number of visitors to the island taking into consideration our infrastructure and services available. Room capacity and environmental concerns also come into play with this decision.”
Niue recorded a high of 3165 visitors last year, 541 more than the 2001 figures of 2624.
The aviation industry now is beset with challenges imposed by the United States-Iraq face-off, which even Poly-nesian Airlines is not shielded from.
Fitzgerald notes that the events of September 11, 2001 had accelerated existing depressions in the industry.
“Already this year, and it’s only February, we have seen many examples of the industry’s woes,” Fitzgerald said. These include:
- America’s and the world’s largest airline, American Airlines, recorded a mammoth US$3.5 billion loss in 2002. Among other corrective measures it has asked staff to forego annual pay increases in order to stay competitive and avoid sliding into bankruptcy.
- The second largest, United Airlines, did in fact seek Chapter 11 bankruptcy protection with debts of US$20 billion. It has already reduced staff from 100,000 to 80,000, with more to come, and its pilots have accepted a 29 percent pay cut.
- Continental Airlines amassed a loss of just under US$0.5 billion in 2002. It is forecasting that it will not return to profitability until 2004 at the earliest.
- Previously highly profitable carriers KLM and Air Canada have reported losses and they too are forecasting far from positive results for 2003 and beyond.
“Polynesian Airlines is not immune from factors that have caused such depressed trading and operating conditions for the industry.”
Like most traditional airlines, Fitzgerald sees Polynesian rivalling stiffly with operators offering largely discounted fares.
The Polynesian Airlines chief executive believes these carriers do not have the rooted work practices and productivity constraints of the established operators.
Prior to 1995, Polynesian had undergone a financially draining expansion programme, a period in which former boss Gates had seen through and resurrected the airline from the doldrums after much corporate restructuring.
Growth over the last five years is reflected in the acquisition of two modern Boeing 737-800 aircrafts and an amplified revenue base. The airline’s profitability, however, was severely affected by international factors.
“Additionally,” said Fitzgerald, “Polynesian’s earnings and profits have been constricted because its ‘home’ destination of Samoa has insufficient quality accommodation facilities to enable extensive wholesale marketing of the destination to our main tourist markets in Australia, New Zealand and the US.”
Fitzgerald sees it critical for Polynesian in the immediate months to focus on the airline’s capacity and demand. Secondly, the airline is monitoring developments of the Joint Airlines Operations (JAO) proposed by the region’s two largest carriers Qantas and Air New Zealand.
“Polynesian enjoys a commercial alliance with Qantas that is beneficial to both parties, but Polynesian competes head-to-head with Air New Zealand on our major trunk routes,” Fitzgerald said.
“While we recognise that the proposed JAO provides synergy and more effective capacity utilisation for both large carriers, we will do our utmost to prevent Polynesian becoming ‘collateral damage’ in the event the JAO gains regulatory approval in Australia and New Zealand.”
Despite the challenges, Fitzgerald believes Polynesian Airlines to be a “solid organisation that will be well placed to overcome those challenges that confront us.”
