Air And Sea

CNMI rejects Palau Air

In a unanimous 5-0 vote, CNMI's Commonwealth Development Authority has rejected a government proposal to invest $500,000 in startup airline Palau Micronesian Air. The CDA review committee commented that projected revenue and load factors are too optimistic, and maintained that high operating costs and competition from Continental Micronesia will inhibit profitability. Air New Zealand has recently pulled out of a lease agreement with PMA. While Yap has committed $500,000 to the airline, the investment hinges upon the Palau Government's projected infusion of $1 million. Pohnpei, Chuuk and Kosrae all have bills proposing a $500,000 investment in PMA pending before their respective legislatures.

Fiji Government Creates Shipping Competition

The Fiji government has announced plans to purchase two cargo ships for inter-island service, creating direct competition for many local ship owners. Leo Smith, the secretary of the Local Ship Owners Association, said the decision was made without consultation and implies a bleak future for private ship owners in Fiji, according to Radio Fiji. Although Transport Minister Josefa Vosanibola has stated that the government will not regulate shipping, the introduction of competition from the state promises to stifle the service of local businesses. In reaction to the announcement, Smith encouraged local ship owners to cease operations, forcing the Fiji Government to take responsibility for all sea transport, and noting that they will not be responsible for any loss or debt incurred.

Hawaiian Airlines Still Turning Profits

Having filed for Chapter 11 Bankruptcy 12 months ago, Hawaiian Airlines has operated profitably for the past 11 consecutive months, including a company record of $1.9 million for February. The strategic decision to file for bankruptcy has enabled the airline to legally renegotiate aircraft leases and turn steady profits. This, in addition to developing marketing programs that target potential passengers directly from the U.S. mainland, has allowed Hawaiian Airlines to offer discounted, competitive rates. In fact, Hawaiian reported flying at a four-fifths load factor in February, close to $10 million in increased scheduled revenues, and continued savings on aircraft maintenance and rent.

New Routes for Pacific Blue and Polynesian Air

After announcing plans to offer service between Australia and Fiji, budget airline Pacific Blue has confirmed its intention to begin flights to Vanuatu. If applications are approved the airline will begin service in September. Pacific Blue representatives visited Vanuatu in early March, and plan to work with hotel and visitor authorities to fuel Vanuatu's tourist economy. Polynesian Airlines will soon offer service to American Samoa-Tutuila and the Manu'a island group-pending U.S. Department of Transportation approval. Inter Island Vacations runs regular charter flights to the same destinations, but recently issued a public notice that its aircraft will be down for maintenance in early April. The Polynesian flights will be run temporarily to fill the gap.

Air Pacific Offers Discounted Fares

John Campbell, Chief Executive Officer of Air Pacific, has announced the permanent availability of new Bula Fares to Australia, New Zealand and the South Pacific. The announcement comes shortly after confirmation of low-cost Fiji services from Pacific Blue and Freedom Air beginning later this year. The new fares offer "great value, (and) also include full quantity Air Pacific service with free meals, drinks, in-flight entertainment and generous seat room," Campbell said in an interview with the Fiji Sun. The four new fares were released after considerable market research and are designed to allow travelers maximum flexibility. Discounted tickets went on sale in late March for travel beginning in early May, with seat allotments managed according to forecast and demand.

Jason Aubuchon PNG Security Lapses The news that an Air Niugini passenger discovered a pistol in his carry-on luggage just before his plane arrived in Singapore recently, and the tragic death of Alan Mourilyanan-a 30-year-old Australian pilot who was robbed and shot in Mount Hagen, has drawn international attention to security issues in Papua New Guinea. PNG airports and seaports are now under close scrutiny by both Australia and the United States, and government officials in PNG are scrambling to implement proper upgrades. The PNG Transportation Department adopted the International Shipping and Port Security code in 2002, which calls for serious regulatory changes in seaport operations. At its minimum, the code requires the development of a security plan, additional security personnel, and equipment renovation and upgrades. According to Transport and Civil Aviation Minister Don Polye, more than 80 percent of PNG's exports go through the country's maritime ports, and unless those ports meet international security standards, cargo vessels will be refused entry into Australian and U.S. territories. In a mid-March interview with the Australian Broadcasting Corporation, Australian Deputy Prime Minister John Anderson said that lax security at PNG airports could be used by terrorists to infiltrate and launch attacks against Australia. Qantas, still Australia's largest airline, has also expressed public concern over airport security in PNG, and announced that the current risks associated with landing commercial flights in Port Moresby will influence future airline schedules. But implementing appropriate security measures in PNG's major airports "will require time and money," according to PNG Airports Chief Andrew Ogil. "Terrorist activities are a new phenomenon to Papua New Guineans, and we are doing everything we can within our capacity and resources." The Australian government has assisted by installing three X-ray machines at PNG terminals in February, but a substantial amount of work remains-work that will likely be slow in coming. Jason Aubuchon can be contacted at jasona@pacificbasin.net.