Air & Sea
Air & Sea
AIR MARSHALLS WOES
Can A Government Airline Work?
All domestic air service in the Marshall Islands came to a halt for three weeks in late August and early September as both of Air Marshall Islands airliners were grounded. The problem—which disrupted essential air travel to remote islands and caused paychecks to be delayed to airline workers when revenue dried up—underscores the difficulty of running a small airline in the western Pacific, a problem magnified by the fact that the airline is a government entity.
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Despite dozens of diagnostic tests, engineers could find no fault in the engine accounting for the purported problem. The net impact of both problems is that the planes were each grounded for about five weeks at a cost of hundreds of thousands of dollars when both lost revenues and repair costs are totaled. Both planes were returned to service in September.
Similar issues are being faced further south where the incoming chairman of Solomon Airlines, Reserve Bank Governor Rick Hou, has asked “whether we (the Solomon Islands) should own an international airline at all.”
His comments came as the airline suspended flights first because of unmet lease payments for its Embraer jet, and then over late fuel payments. The plane is leased from Australian company SkyAirWorld, which has offered to forgive the debt if it is granted permission to operate the Solomon Islands-Australia service.
Hou says the airline’s finances are bleeding, and of the debts, “you really can’t squeeze blood out of stone.”
Other options include codesharing, and partners such as Air Vanuatu and Air Niugini.
In late September Virgin Blue, which runs low cost services to Fiji, Samoa, Cook Islands and Vanuatu from Australia, also expressed its interest in the route.
—with Giff Johnson
BRIEFS
Vanuatu’s government has announced that Air Vanuatu will be privatized. The business development support arm of the World Bank, the IFC will advise on the sale, and AusAID will fund the project. IFC also worked with the Samoan government on the privatization of Polynesian Blue.
Airlink airline in Papua New Guinea has shut down after suffering losses worth more than US$1.3 million. Management says they were grounded by the Civil Aviation Authority for too long after a crash in Goroka in May, leading to the carrier’s demise.
Swire Shipping announced the start of a direct twice-monthly shipping service from northern China to Lae, Papua New Guinea in August. It means cargo carried by Swire from China can be shipped to Lae without going via Singapore, as is currently the case.
While Pacific Island carriers are struggling, Virgin Blue Holdings Ltd. says its net profit nearly doubled for the year ended June 30 as its strategy of attracting higher yielding passengers continued to bear fruit. The Australian airline, which also flies to Fiji, Tonga, Samoa, Vanuatu and the Cook Islands, said net profit for the year rose 92 percent to A$215.8 (US$173) million from A$112.2 million a year earlier. And Air New Zealand has announced a profit before tax of NZ$268 million (US$203 million) for the year ended June 30 2007, up 79 percent from its results last year.
Guam will receive more than $1.5 million from two grants from the Federal Emergency Management Agency to improve security at the civilian port at Apra Harbor. The Port Authority of Guam will receive $1.4 million from the fiscal 2007 Port Security Grant Program to support increased port security risk management and develop a risk management/mitigation and business continuity plan. The port will also receive $169,773 to assist the development, maintenance, and improvement of local emergency management capabilities.
The price of international air tickets for passengers departing Tonga will increase by $30 due to the inclusion of a $10 Security Fee and a $20 Airport Development Fee. An additional $2 security fee now also applies to all departing domestic flights.
