The state of the Pacific Islands' aviation industry generally isn't healthy. With a few exceptions such as two of the region's largest national airlines, Fiji's Air Pacific and the now profitable Papua New Guinea's Air Niugini, it never really has been.
Higher costs for fuel, only being partly recovered by fare surcharges, are burdening airlines everywhere. This burden is particularly hard on Pacific Islands routes on which operational costs are high and passenger and cargo traffic business is frequently lean.
Air Pacific, Air Vanuatu and Polynesian Airlines, until Samoa's government entered into an airline deal with Australia's Virgin Blue, have been forced to cut their fares by margins of around 30% just as fuel costs began to rise. They had to match the competition of lower fares offered by the Australian budget airline. This has been great for tourism and tourists crying for cheaper fares, but painful for the airlines' bottom lines.
Air Pacific also had to match the competition from Freedom Air, a budget subsidiary of Air New Zealand.
The impact of competition from the aggressive Virgin Blue, operating as Pacific Blue, has had on Air Pacific and Air Vanuatu is debatable. The islands' airlines say that business on their Australian routes is not only holding up but increasing since fares are cheaper.
The buoyant business could also be the repercussion of alarm caused by terrorism incidents in Asia, the SARS flu outbreak and now the chicken flu threat, and perhaps the 2004 Asian tsunami disaster. All of these could have steered tourists to the Pacific Islands who may instead have gone to Asia or other regions.
STATE OF THE AIRLINES
DOING WELL
Air Pacific
Air Niugini
STRUGGLING
Air Nauru
Aircalin
Air Tahiti Nui
Air Vanuatu
Air Marshalls
REBUILDING
Solomon Airlines
Islands Business
Higher costs for fuel, only being partly recovered by fare surcharges, are burdening airlines everywhere. This burden is particularly hard on Pacific Islands routes on which operational costs are high and passenger and cargo traffic business is frequently lean.
Air Pacific, Air Vanuatu and Polynesian Airlines, until Samoa's government entered into an airline deal with Australia's Virgin Blue, have been forced to cut their fares by margins of around 30% just as fuel costs began to rise. They had to match the competition of lower fares offered by the Australian budget airline. This has been great for tourism and tourists crying for cheaper fares, but painful for the airlines' bottom lines.
Air Pacific also had to match the competition from Freedom Air, a budget subsidiary of Air New Zealand.
The impact of competition from the aggressive Virgin Blue, operating as Pacific Blue, has had on Air Pacific and Air Vanuatu is debatable. The islands' airlines say that business on their Australian routes is not only holding up but increasing since fares are cheaper.
The buoyant business could also be the repercussion of alarm caused by terrorism incidents in Asia, the SARS flu outbreak and now the chicken flu threat, and perhaps the 2004 Asian tsunami disaster. All of these could have steered tourists to the Pacific Islands who may instead have gone to Asia or other regions.
STATE OF THE AIRLINES
DOING WELL
Air Pacific
Air Niugini
STRUGGLING
Air Nauru
Aircalin
Air Tahiti Nui
Air Vanuatu
Air Marshalls
REBUILDING
Solomon Airlines
Islands Business
