Air & Sea
Air & Sea
Matson Raises Rates
Matson Navigation Company, Inc. has announced a rate increase for its U.S. Mainland-Hawaii service, beginning Jan. 11, 2004. Citing growing contractual operating costs and a commitment to modern services, President and CEO James Andrasick noted that the increase is “consistent with [Matson’s] longstanding philosophy of implementing modest, incremental increases as necessary.” In addition to rate increases of US$125 per westbound container and US$60 per eastbound container, Matson also expects nominal increases in terminal handling charges. The new rates come just months after the launch of two state-of-the-art container ships, at an estimated cost of $220 million.
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Aloha Steps Up Service
Aloha Airlines began flying directly from Honolulu to Kwajalein in a Boeing 737-700 aircraft last month. The new route now bypasses Johnston Atoll, which the U.S. military is closing down and turning into a national park. The change in aircraft is similar to the switch made by Continental Micronesia a few years ago, when it began flying a Boeing 737-800 to avoid the Johnston stop. The twice-weekly flight departs from Honolulu Mondays and Thursdays, arrives in Kwajalein and continues on to overnight in Majuro. The return flight departs from Majuro Wednesdays and Saturdays, returning to Honolulu with a stop in Kwajalein.
Air Niugini Recovers
After running at a deficit for the past 10 years, Papua New Guinea’s national airline, Air Niugini is expecting $13.7 million in profit. Airline Chairman Joe Tauvasa credited the profitability to an improved foreign currency exchange rate and enhanced cost control, while noting that fiscal years 2002-2003, during Air Niuguini’s privatization process, were most troublesome. Air Niugini pilots, meanwhile, called off a strike in late November after airline management demanded a 10 percent pay cut. National Air Pilot’s Union President Peter Ansphil said that pilots might consider the cut if an independent auditor were allowed to review the airline’s current financial situation.
Air NZ-Qantas Merger Appealed
Qantas and Air New Zealand have asked the High Court of New Zealand to allow the carriers to merge. Both Australian and New Zealand commerce commissions, for fear of creating a monopoly and stifling competition, blocked the proposed alliance between the two airlines earlier this year. Australia-based discount carrier Virgin Blue was granted permission to fly to New Zealand, Fiji and Vanuatu last July, and has now applied to fly to New Caledonia. Qantas responded with plans to launch its own, Jet Star discount carrier to undercut Virgin Blue.
New Zealand Export Fee
The New Zealand government has announced a new export fee to begin in July 2004. Money raised from the new tax will be used to upgrade New Zealand port security, in compliance with U.S. standards. Customs Minister Rick Barker said, “those [exporters] who benefit from New Zealand’s reputation as a safe and secure trading partner should contribute toward the cost of meeting new [U.S.] requirements.”
Tongan Troubles
Nation’s Airline Is An Expensive Luxury
by Jason Aubuchon
Royal Tongan Airlines has been expanding, amid heavy controversy. The airline began flying between Auckland, Sydney and Rarotonga last October, and has recently begun service to Honolulu. RTA is also planning to increase flights to the Cook Islands.
In late October, however, the international accounting firm KPMG advised the Tongan government that its national airline was technically insolvent. According to the report, RTA had forecast a 65 percent load factor, and is currently running at only 34 percent. Moreover, the report indicated that the airline stands to lose US$6 million this fiscal year.
In a press conference, the Governor of Vavau, Hon. Akauola, said that one solution to RTA’s financial woes was for the government to “write it off.” In response to the report and press conference came public calls for Royal Tongan to ditch its international service and run a scaled-down domestic airline. Other residents have begun to boycott the airline, noting that a $10 million contribution is a steep demand for a government that operates on a recurring annual budget of roughly $50 million. Air New Zealand, Air Pacific and Polynesian Air all offer alternative air travel from the kingdom.
RTA Chief Executive, Logan Appu, has indicated that he has asked the government for the much-needed capital, and said the KPMG figures had been exaggerated and the airline only requires $5 million. He further explained that RTA’s international service remains vital to the airline’s success.
The Tongan government, meanwhile, has expressed outrage at New Zealand’s intention to review its relationship with the kingdom. New Zealand provides Tonga with US$3.6 million in aid annually, and has reacted strongly to recent changes in the Tongan constitution, which increased the state’s control of the media.
For Saipan correspondent Frank S. Rosario's story on Saipan harbor’s security problems, see here.
Jason Aubuchon can be contacted at jasona@pacificbasin.net.
