Air & Sea

Pacific Airlines Respond to Increased Fuel Rates

With U.S. oil futures at their highest since 1983, Pacific airlines have begun adding a surcharge to passenger tickets in an effort to help cover the cost of increasing jet fuel prices. Air Pacific, Air New Zealand, Qantas, Virgin Blue, and Continental Airlines are just a few of the airlines that have introduced the surcharge, and many other airlines are expected to follow. Air Pacific's Chief Executive Officer, John Campbell, noted, "the cost of a barrel of oil for jet fuel has increased by more than 60 percent within this year…a cost that cannot be absorbed by Air Pacific."

Pohnpei Invests in Palau Micronesia Air

The Pohnpei State Legislature passed a bill at the end of May authorizing an investment of $500,000 in Palau Micronesia Air. Pohnpei plans to draw the money from its Investment Development Fund. Like Yap, the Pohnpei investment is contingent upon the Palau Government investing $1 million. Ease of access to the Philippines for medical referrals and an increased effort to stimulate the state economy were both cited as reasons for the investment. PMA's paid-in capital now totals nearly $2.8 million, including $1.1 million from Surangel & Sons, a Palauan-owned business. With an additional $1.75 million pending from the Republic of Palau, ODIC (a Taiwan Company), and Volito Aviation, PMA appears to be rapidly approaching their target investment goal of $5 million. The airline plans an inaugural flight at the end of July. web: palau-air.com

Horizon Lines Changes Owners

In a $650 million deal brokered in February, Horizon Lines has been sold by the Carlyle Group to the private equity firm Castle Harlan. Marcel Fournier, managing director of Castle Harlan, said that his organization has been "impressed with the results that Horizon Lines has achieved over the last several years and (is) excited about the company's prospects." Horizon Lines' Chairman and CEO, Chuck Raymond, added that "the transition between the change of investors will not impact in any way the service and reliability our markets have come to expect from Horizon Lines. The management, vessel personnel, staff, schedules and routes will remain as is." Horizon Lines manages 16 vessels between the U.S. mainland, Alaska, Hawaii/Guam, and Puerto Rico. web: horizon-lines.com

Wallis and Futuna Plan Flagship Airline

The French Polynesian territory of Wallis and Futuna, with a population of 15,000 and land mass of 164 square miles, is planning to launch its own airline. According to an interview between Les Nouvelles Caledoniennes and Atolomako Puluiuvea, a spokesperson for the startup airline, a joint venture is being planned between the territory, traditional chiefs, the King, a local bank and private investors, to launch Air Wallis. The initial three-year plan calls for the airline to lease a Boeing 737 from Air Vanuatu, and to offer bi-weekly flights between Wallis and Futuna, Vanuatu, Fiji and New Caledonia. Air Calin is currently the only airline servicing New Caledonia and Wallis and Futuna, and Puluiuvea hopes the introduction of a second airline will help reduce the cost of ticket prices.

Cape Air Joins Continental Micronesia

Continental Micronesia and Cape Air have announced plans to begin commuter flights between Guam and Rota, CNMI, in July. Cape Air is a Continental code-share partner currently flying in and around Florida and the Caribbean. The new Continental Connection route will operate 46-passenger, turbo-powered ATR-42s. Continental Micronesia President and CEO, Mark Erwin, explained that Continental "currently flies out of seven cities in Japan, and traffic from these cities will certainly bring an influx of visitors to the CNMI." Initial round trip tickets are priced at $140, and future plans will include flights between Guam and Saipan, according to Continental Micronesia. web: flycapeair.com, continental.com

Jason Aubuchon Royal Tongan Airlines Collapses Some 1,800 Royal Tongan Airline passengers were stranded in Tonga, Auckland, Sydney, Rarotonga and Honolulu when the airline ceased operations April 22nd. For many, it took as long as three weeks for RTA to make alternate travel arrangements with other airlines. The news of RTA's collapse comes as no surprise. An independent auditor deemed the airline technically insolvent last October, and its primary investor, the Tongan government, lost 40 percent of its annual revenue to questionable investments made by the King's Court Jester, Jessie Bogdonoff. Although the Tongan government is reported to have injected $20 million into the airline since its inception in 1985, RTA had lost $13 million this year alone, with total losses estimated at $20 million. In fact, the airline's finances had become so dire that when its two domestic aircraft broke down, it could not afford to make the necessary repairs. The government was moving to appoint a liquidator to close down the airline and negotiate severance packages for the 200 employees-including pilots, cabin crew and ground staff-affected by the collapse. While international routes will be handled by the other four airlines servicing the Kingdom-Air New Zealand, Air Pacific, Air Fiji and Polynesian Airlines-the loss of domestic service could pose a serious problem. The Vava'u resorts of Northern Tonga are the nation's primary tourist destination, and they are currently inaccessible. The collapse of Royal Tongan came just as the Kingdom's main tourist season was to begin. Tongan Prime Minister Ulukalala Lavaka Ata has publicly defended his nation's airline, saying that it assisted "with the development of the whole economy." Reports in late May of Crown Prince Tupoutoa's plans to form a new airline in conjunction with New Zealand-based Pion Air may fill the temporary gap in domestic air service. Pacnews reported Tonga's newest domestic airline service, Fly Niu Airlines took off at mid-day June 16 on its maiden flight to Vava'u from Tongatapu. Jason Aubuchon can be contacted at jasona@pacificbasin.net.