Nauru offers ownership, but Honiara stalls

Samisoni Pareti
Out of the ashes of a broken and bankrupt airliner rises the proverbial phoenix of a newer and larger operator called Our Airline.

The Nauru Government, one time owners of the now defunct Air Nauru, is selling Our Airline as a sub-regional airline encompassing six countries of western and northern Pacific, all linked by their support for Taiwan.

That linkage is important as it was Taipei that provided the funds that enabled Nauru to purchase the virtually new Boeing 737-300 series aircraft and re-brand it as Our Airline.

Last month in Majuro, representatives of the Federated States of Micronesia, Kiribati, Nauru, Solomon Islands and Tuvalu joined their host discussing the concept of turning Our Airline into a truly sub-regional airliner.

Meeting proponent Dr Kieren Keke-transport minister of Nauru-said the meeting was needed to move the concept forward.

"There has been a general expression of interest in our proposal so the meeting was to take the concept to another level," Keke told ISLANDS BUSINESS last month.

"We wanted to sit down and consider how we can operate the concept commercially, and of course, profitably."

The Majuro meeting resolved that the way forward would be the formation of a taskforce or working group comprising representatives of all six countries. This would see to the conduct of a cost-benefit analysis of such a sub-regional airline.

"The idea is for the working group to wade through legal and regulatory issues in order to come up with a clear mechanism for such a concept.

"This will then be ready for discussions at the next Pacific Islands Forum summit in Tonga later in the year."

Keke said the idea for the Majuro meeting was borne out of discussions at last October's Forum summit in Fiji and it was for this reason that any outcome for a sub-regional airline would have to be submitted to the Forum.

Indeed the Majuro meeting last month, according to the Nauruan medical doctor-turned politician, was funded by the Suva-based Forum Secretariat.

"The Forum Secretariat's involvement is justified because the concept for a sub-regional airline fits in perfectly with the Forum's Pacific Plan.

"The concept is a regional solution to a national problem, the common issue of air transportation."

In a telephone interview in December, Keke also admitted the reluctance of at least one of the six countries supporting Our Airline.

Solomon Islands has asked for more time before it could offer its 100 percent commitment because of the potential conflict and threat Our Airline poses to its international carrier.

"There are, of course, some national issues that Honiara would like to confront first before it could offer its full commitment.

"The reality is that Solomon Airlines is losing millions of dollars each year and financial agencies like the Asian Development Bank have suggested it was no longer viable losing that kind of money.

"No longer does it make economic sense for islands countries to be losing millions in propping up their own national carriers."

Honiara, ISLANDS BUSINESS has been told, is sure of one fact-that without the lucrative Brisbane/Honiara leg, the Our Airline concept as touted by Keke and his government can hardly make money.

After that first sector, other legs of Our Airline of Honiara/Nauru and Nauru/Majuro are hardly viable.

Solomon Airlines, this magazine has been told, is pleading with the Manasseh Sogavare Government to be mindful of the interests of its own national carrier when considering support for the Nauru Government's concept of a sub-regional airliner.

Solomon Airlines is drawing Honiara's attention to what its eastern neighbour Fiji has done, refusing to return Air Nauru's former Tarawa/Nadi route to Our Airline.

When Air Nauru lost its sole Boeing 737 jet to its North American financier in December 2005, Fiji's international carrier Air Pacific stepped in and has been servicing the Tarawa/Nadi sector ever since.

"The Fiji connection is very important for us," Keke had told this magazine at the Forum summit in Fiji last October.

"It's another major centre in the Pacific obviously and it's very important for Nauru and  other small islands that we service to be able to get to Fiji in a cost-effective manner.

"It has been a vital route for the airline in the past in terms of the traffic on that route which makes it a profitable sector.

"When Air Nauru ran into problems, we began by chartering Air Pacific to keep that sector open and I think Air Pacific realised the benefits of operating that sector and has now taken it on in their own right.

"Unfortunately, we've had some difficulties reaching an agreement with the Fiji Government on being able to re-commence that sector as Our Airline.

"So we are still looking at ways on how we can provide connections to Fiji and we're confident we will be able to provide connections into Nadi possibly from Majuro."

Keke said his government could understand the dilemma countries like the Solomons face, weighing the benefits of a regional initiative to that of a national one.

Pride, he said, is also a key factor in the debate for a sub-regional operator.

"Obviously, there is some pride associated with having your own national airline," said Keke.

"We in Nauru have made the conscious decision to move away from that. After independence, it was okay to have your own airline.

"But now that you have developed sufficient maturity, you begin to realise that real independence is economic independence.

"Having your own airline that is losing millions of dollars is not a good symbol of real independence."

As the working group of the six islands nations begins work on a cost/benefit analysis, Our Airline will be managed for the time-being by former Air Nauru CEO, Geoffrey Bowmaker.

Apart from looking at re-taking destinations like Norfolk Island which Air Nauru had given up, Our Airline, according to Keke, is also eyeing other routes in the northern Pacific.

"With the loss of their aircraft last year and the gap that was created, Norfolk had to look at alternative options.

"They had entered into an arrangement with an Australian company.

"We believe that we've got an aircraft and a service that can provide them with the quality of service they are looking for, which is not provided by the current provider.

"I understand they've got a timeframe in that commitment and we have opened up discussions again with the Norfolk Government and these are discussions that we will continue to pursue to make available the option for Our Airline to takeover that sector again in the future.

"There's a lot of demand from the northern Pacific which at the moment does not have a good north/south connections. They've got a very effective east/west service running for them.

"A lot of countries there repeatedly told us they need a north/south connection.

"We've had discussions with a number of northern Pacific countries and Our Airline will be looking at various options available to provide that link that will get them into central and southern Pacific."