Air and Sea

Airport Upgrades & Repairs

The Republic of the Marshall Islands has prepared a nearly $40 million plan for extensive airport renovation, and submitted it to the U.S. Federal Aviation Administration for review. The 10-year proposal contains plans for major runway, terminal and parking lot improvements, as well as better security. Although the proposal has not yet been approved, the FAA has $3.4 billion in grant money to be spread throughout all of their jurisdictions this year. Meanwhile, Air Pacific, Air New Zealand, Aloha Airlines, Qantas and Polynesian airlines have each agreed to donate $20,000 to the Kiribati government for airport upgrades on Christmas Island. Once upgraded the airport will serve as a potential emergency-landing site for each of the airlines, replacing Johnston Island, which is no longer available.

Vanuatu Airline Merger

Air Vanuatu's Chairman, Dominique Dinh, has begun a three-month process through which he hopes to complete a merger with Vanair. "I have had preliminary meetings with Vanair to clear the air and I have informed them that we need to work together," Dinh said in an interview with ABC. Both airlines have agreed to re-route domestic flights in an effort to create more air traffic to rural areas. Other plans include the US$856,000 sale of one of Vanair's planes for loan repayment. "Like in another economic rescue action plan, there will be casualties and in our case I strongly think it is wise to do away with one of Vanair's aircraft," Dinh said. Vanair has been seeking buyers since late last year.

CNMI Invests in Palau Air

The Northern Marianas Commonwealth's House of Representatives passed a resolution to invest $500,000 in Palau Micronesia Air. The money, furnished by the Commonwealth Development Authority through a loan from Pacific Islands Development Bank, would be given as direct equity to the startup airline, authorizing the CNMI government two seats on the airline's board and 10 percent of PMA's common stocks. In a presentation in early January, airline President Alan Seid said the money "is direct equity and not a loan to the airline...(presenting) a risk you must recognize." The House of Representatives will need to pass a bill enabling CDA to apply for the loan before money can be given to the airline.

Australia Funds FSM Border Control

The Australian Embassy has combined its small grants scheme for Palau, the Marshall Islands and the FSM to install a computerized border management system in the four states of Kosrae, Pohnpei, Chuuk and Yap. Australia previously supported the installation of systems in Palau and the Marshalls, enabling both countries to improve their ability to monitor visitors and visa requirements. The project, worth A$600,000, has drained the small grants fund for the last six months and is expected to continue to do so for another 12 to 18 months, according to Brendan Doran, Australia's ambassador to the FSM.

Boeing Capital Proposes Hawaiian Air Takeover

One of bankrupt Hawaiian Airlines' largest creditors, Boeing Capital Corp., is proposing to take over the struggling carrier as part of an investment group. Boeing Capital, which has 11 Boeing 717 and three Boeing 767-300 jetliners on lease to Hawaiian, is working with Corporate Recovery Group, LLC and BCC Equipment Leasing Corp. It is proposing to pour $30 million into Hawaiian Air. Bruce Nobles, who headed the airline from 1993 to 1997, would lead the group's management team. The Boeing Capital Corp. proposal is one of a number that are expected to be presented to U.S. Federal Bankruptcy Judge Robert Faris, who must approve any plan.