Air and Sea

Samoa Air Files for Bankruptcy

After filing for Chapter 11 bankruptcy protection in California court, Samoa Air's Chief Executive Officer Andre Lavigne said that "events of the last few weeks made it very clear that the advantages of doing this far outweighed the disadvantages." Those events include a court decision that required the airline to shell out more than US$400,000 in back lease payments to an Australian firm. Lavigne said that the management of the airline remains in place and they hope to have employees return to work as quickly as possible. He added that the bankruptcy filing will "permit the company to…return to the skies at the beginning of 2004."

Horizon Adds Refrigeration

Horizon Lines will introduce 300 new high-cube refrigerated containers into its fleet in December, with plans to add 600 more by mid-2004. The containers will be spread through many of Horizon's trade routes, including Hawaii and Guam. In a press release, Vice President of Sales and Marketing Karen Richards said that equipment is of foremost importance in the refrigerated cargo market. She added that the new units "will significantly reduce the average age of our fleet and ensure the highest levels of service delivery for our refrigerated cargo customers."

Majuro Seeks Runway Repairs

The U.S. Federal Aviation Administration has been asked to help fund Majuro runway and airport renovations that could cost up to US$23 million. In 2001, the FAA told Marshall Islands officials that resurfacing the international airport's runway was a priority. "The main safety issue is the runway," says government official Robert Muller. "The FAA is aware of the problem and they're keen to help out." If the project is approved, the FAA fund will provide 90 percent of the funding, with the local match amounting to just 10 percent of the overall cost. Every time airport crews sweep the runway, they come up with small rocks and aggregate. "It means it's not getting better," airport authority manager Jack Chong Gum said of the condition of the runway.

Guam to Privatize Port

Guam lawmakers debated a bill in early December requiring the Port Authority to hire an experienced company to take over management. Only one of three gantry cranes is currently functional, and the port would cease operations if the last one were to break. Sen. Randall Cunliffe introduced the bill, saying that privatization will prevent the Guam government from dipping into money allotted to the Port Authority. "If the commercial port shuts down, we can't off-load foodstuffs, goods for sale, and nobody is going to come to Guam," Cunliffe added in an interview with Pacific Daily News. He said that the single working crane has forced many ships to leave port before fully unloading their cargo so as to avoid schedule delays.

Codeshares and Route Changes

A codeshare agreement between Air Nauru and Solomon Airlines is expected to ease the capacity of flights between Brisbane and Honiara. The agreement allows Air Nauru to carry extra passengers that Solomon Airlines has been forced to turn away. Polynesian Airlines' service from Auckland to Niue has been cut back to once weekly, but the airline hopes to resume twice-weekly flights in the first quarter of 2004. Pacific Blue has announced that daily service between Wellington and Sydney will begin in mid-March. And the Commonwealth of the Northern Mariana Islands hopes to receive approval from China in January to begin direct routes to Tinian. China Southern Airlines operates two weekly charter flights from Guangzhou, but wants to establish air service from Shanghai and Beijing.

Jason Aubuchon. Low-Budget Airlines Face Off Since its arrival on the airline scene in 2000, low budget carrier Virgin Blue has taken over one third of Australia's domestic air travel. Originally seeded with A$10 million, the airline is now estimated to be worth $2.3 billion-an amazing success rate by any standard. Virgin Blue's no-frills approach to air travel has mounted impressive profits, and the company made a solid debut in early December on the Australian Stock Exchange, listing at $2.40 a share, compared with the initial public offer price of $2.25. In a recent interview with ABC, Qantas CEO Geoff Dixon described the dramatic rise of the budget carrier as "the biggest change in modern aviation since the 747," and has responded with JetStar, Qantas' own $1.5 billion foray into the world of discount air travel. JetStar promises to have the cheapest seats in Australia. Qantas profits dropped 19.7 percent last year. The impending price war between JetStar and Virgin Blue is sure to please Australian travelers, who are currently enjoying the lowest airfares in many years. Virgin Blue's sister airline, New Zealand-based Pacific Blue, has announced flights between Christchurch and Brisbane with one-way fares as low as NZ$99. Virgin Atlantic, meanwhile, plans to begin direct flights between London and Sydney early this year, funneling more passengers into Virgin Blue routes. Plans for a new international airport in Seaqaqa, Fiji, may depend on a deal that has Virgin Blue flying directly into Vanua Levu, a move that would be sure to increase traffic to Fiji and stimulate the tourist economy. Many Pacific nations are hoping the budget-airline trend will extend beyond Australia. Palau Micronesia Air is scheduled to launch in April. While not defined as a budget carrier, PMA will be competing with the long-entrenched Continental Micronesia on routes in the North Pacific. The success of the budget carrier airline model in Australia continues to drive down prices, offering hope of affordable accessibility to the islands of the Pacific. Jason Aubuchon can be contacted at jasona@pacificbasin.net.