Fiji Air War

Jason Aubuchon

It is the era of the budget airline carrier, and serious competition is coming to Fiji.

Australia-based Virgin Blue, which has taken over one third of domestic travel in Australia, has announced its intention to begin routes to Fiji. Air New Zealand's subsidiary, Freedom Air, plans to launch service from New Zealand beginning in April. Both airlines are awaiting approval from the Fiji government.

Meanwhile, the New Zealand travel agency Flight Centre has announced charter service from four New Zealand cities to Fiji at up to NZ$200 below current rates, with plans to begin marketing all-inclusive holiday packages at competitive prices.

The imminent price war has the Fiji government concerned about the future of national carrier Air Pacific. The airline has been matching Air New Zealand's current rate of NZ$699 round-trip with five nights accommodation, but has commented that popular routes to Australia and New Zealand subsidize other, less popular routes to places such as Tonga and Samoa. The introduction of low-budget competition on popular routes to Fiji will force Air Pacific to offer competitive prices, thereby increasing fares on routes to other islands.

According to the Fiji Village News, Prime Minister Laisenia Qarase has pledged to protect Air Pacific if direct competition is allowed, but speculated that the competition might be beneficial to the economy. Not according to Air Pacific's Director, John Campbell. In an interview with Fiji TV, Campbell said that low-budget carriers attract low-budget tourists without discretionary spending money. He cautioned people against presuming that low-cost carriers will benefit Fiji's tourism industry.

At one time small-island justification for developing national, flag-carrying airlines was that foreign carriers were too expensive, and their service too infrequent. Virgin Blue's Pacific strategy may turn that justification on its head.

Jason Aubuchon can be contacted at jasona@pacificbasin.net.