Islands Business - Aviation: DOUBLE TROUBLE FOR OUR AIRLINE

Solomons, Fiji not playing ball on Nauru proposal

Samisoni Pareti
Plans by Nauru to form a regional airline suffered two setbacks last month with one of its proposed shareholder declining to offer its 100% commitment. In addition, its desire to introduce a truly island hopping route by linking six destinations in one flight had been thwarted by Fijian authorities who are still keen to protect its pretty successful operator, Air Pacific.

Pekoa Airport, Espiritu Santo... Solomons Islands delegation with their new Boeing 737-300 in the background.

“We haven’t formed a position on whether to support the formation of Our Airline and we are not going to give it our 100% commitment,” Nairie Alamu, permanent secretary for Civil Aviation of Solomon Islands, told Islands Business last month.

Instead, Alamu said the Manasseh Sogavare administration had rallied behind its international carrier, Solomon Airlines.

“Of course, we would continue to support Solomon Airlines because it is our national airline,” said Alamu.
She also questioned the role of the Secretariat of the Pacific Islands Forum in initiating meetings on plans by the Nauruan Government to offer what used to be Air Nauru, a sub-regional carrier and now flying a new Boeing 737 under the Our Airline banner.

Purchased for it by Taiwan after the sole Air Nauru 737 aircraft was seized by its American creditors last year, Nauru is proposing that the six allies of Taiwan in the Pacific each take equal shares in the airline.

“Obviously there is some pride associated in having your own national airline,” Dr Kieren Keke, Nauru’s transport minister, had told Islands Business in December.

“We in Nauru had made the conscientious 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.”

Keke referred to an Asian Development Bank report on aviation in the Pacific which said in part that it was unviable for the Solomon Islands Government to keep using public money to prop up Solomon Airlines as it was losing millions of dollars annually.

But Alamu made it very clear that Honiara was not going to abandon its national carrier to Nauru’s proposed Our Airline. She and her government were also acutely mindful that Nauru’s idea of a sub-regional airliner would need the Brisbane/Honiara route if it is to become viable. After Solomon Islands, loading in the other routes of Nauru and Marshall Islands are deemed too small to at least make Our Airline break even and steer it away from the debilitating losses that plagued its forerunner.

Keke and his government in Yaren are also discovering very quickly the obstacles that stand in the way of an earlier attempt to make Air Pacific a truly regional operator. Lack of commitment like that being displayed by Honiara and the protection of national interests as shown by Suva are limiting Our Airline from fully spreading its wings.

In agreeing to sign an air services agreement with Nauru last month, Fiji declined to offer more than one intermediate point of travel. This means that Our Airline can factor in only one stopover when flying between Yaren and Nadi. So its intention to make a Brisbane/Honiara/Nauru/Tarawa/Majuro/Nadi service has been thwarted.

“No, the agreement doesn’t allow Nauru to make a stopover in Kiribati,” explained Joeli Koroikata, acting director of civil aviation in Fiji.

“The ASA (air services agreement) we signed allowed for only one intermediate point and they have designated Majuro not Tarawa.”

Koroikata said an existing ASA between Fiji and Kiribati prevented the Fiji Government from agreeing to a Tarawa stopover for Our Airlines.

“Air Pacific is already servicing the Nadi/Tarawa route, in fact it’s doing a two-weekly service there. That route will become unviable the moment we introduce another operator.

“As the designated national carrier for Fiji, we are duty-bound to protect the interests of Air Pacific.”

In a very brief electronic mail, Geoff Bowmaker, chief executive of Our Airlines, confirmed Koroikata’s explanation. “Yes, we can fly Nauru- Majuro-Nadi or Nauru- Nadi direct if we want,” Bowmaker’s email says.

“We have not decided on a start date as yet, so it’s probably a bit early for a story on this.”

Monitoring these developments has been the Suva-based secretariat of the Pacific Islands Forum which initiated a meeting of potential Our Airline owners in the Marshall Islands last December.

Patricia Sachs, the development/cooperation adviser at the secretariat, said the organisation’s involvement was in line with the wishes of Pacific leaders who are members of the Small Islands States (SIS) grouping within the Forum.

“We’ve been tasked by our leaders,” said Sachs.

“It was raised at the SIS meeting, a grouping of smaller islands states, during the last Forum (October 2006) meeting.

“The whole issue of transport was raised by them of which this was a part, and the other side of it was shipping. But it was more shipping in terms of being able to carry goods which we are also working on in terms of a feeder service study being done.

“A lot of this has come out of the Pacific Plan. You will realise that in the Port Moresby Forum (2005), we were tasked with establishing a special unit for small islands states, which we did last year.

“But our role in air services is really to facilitate, get the cost/benefit study done and so on.”
Sachs clarified the Majuro meeting last December did not endorse the Our Airline model as proposed by Nauru.

Instead, representatives of the Federated States of Micronesia, Kiribati, Marshall Islands, Nauru, Solomon Islands and Tuvalu decided to form a taskforce to oversee a cost/benefit study of a sub-regional airline, she said

“We had agreed that we would further explore this whole concept of a sub-regional airline.

“Whether it will be under the Our Airline banner or not, was the question that would come up later on down the track.

“So we had agreed that we would establish a taskforce and part of the taskforce’s responsibilities would be to look at what sort of animal this would be, what a sub-regional airline would look like.

“And in order to do that, we agreed that we would use the Our Airline proposal as a basis for doing a cost/benefit analysis.

“So rather than starting from scratch, we’ve already been given one model which is the Our Airline concept, or the proposal from Our Airline.

“We would look at that and also explore other options. Once the cost/benefit analysis has been done, then the taskforce would meet again and discuss, analyse what comes out of this analysis.

“Part of the terms of reference for the cost/benefit analysis is looking at the economics of setting up an airline, looking at some of the modalities that could be used, whether we do a private/public sector partnership sort of arrangement, whether we do public/public arrangement or whether we do a government arrangement.

“It all depends on what this study will come up with. So in essence we came away from Majuro with an agreement to further explore the concept but not necessarily adopt the Our Airline proposal. As you would appreciate, there would have been some reservations, and that’s normal. It’s all part of the negotiations.

“So what we are proposing is that in the next meeting, once we have done the cost/benefit and we are probably looking at the next meeting around May/June, we have to consider the options and then propose to our leaders which will be the most viable option,” Sachs said.