| We Say: AVIATION IN REGION RARELY WITHOUT TURBULENCE |
‘It is time national governments viewed their flag carriers as profit making enterprises to serve its people first rather than as symbols of national pride meant to be kept flying at any cost.'
The story of aviation in the South Pacific has rarely been without turbulence. Every once in a few years, an airline either goes belly up or is grounded for technical or financial reasons. These scenarios have been enacted time and again among the small national airlines throughout the region.
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Solomon Airlines' E-170: grounded. Pic: Dev Nadkarni
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Last month, Solomon Islands’ national flag carrier, Solomon Airlines, faced that fate. Just a couple of months after trailblazing in the region with the new, state-of-the-art medium range Embraer jet (E-Jet), it lost the plane when it was taken away by its leasing partner for non payment of installments. The carrier was left without a jet and with hundreds of stranded passengers, especially when a large international Internet conference—the first of its kind in the Solomons—was on in Honiara.
Medium range regional jets have been touted as the answer to the Pacific Islands region’s scattered geography and erratic load factor problems for some time now. The new regional jets like the Brazilian made E-Jet are fast becoming a favourite with operators all over the world because of their ability to fly economically with small passenger loads, their quicker turnaround times and their advanced design and operating features.
A measure of the plane’s popularity is the number of units that the aircraft maker is delivering every month to airlines all over the world with an order book that is getting bigger. Yet, Solomon Airlines could not fly the plane viably and lost the only equipment it had to connect with international destinations.
Some members of the Solomon Airlines management were quick to blame the new aircraft for its woes. There had been mounting complaints that the aircraft had to routinely fly without its full complement of luggage having to leave behind passengers’ baggage at the point of departure. The aircraft was too small, they said, and that the previously leased Boeing 737 was better in this respect.
One of the reasons why it had to leave behind the baggage on many occasions was that owing to low aviation fuel stocks in Honiara, it often had to fly from Brisbane carrying enough fuel to cover its return flight, thereby having to cut down on the baggage loads.
This is yet another instance of the long history of the manner in which government-owned air services have been operated in the region. A few years ago, Tonga’s international airline sputtered to a halt, thanks mainly to poor management practices. A couple of years ago, the Samoan Polynesian Airlines too faced a similar fate. But the government took some quick corrective action and the entire ball game of international aviation in Samoa has undergone a sea of change.
After mounting losses, the Samoan government—owners of Polynesian—decided on embarking on the public private partnership route and what was a loss-making operation turned out a decent profit in the first year of operation, rising to a pre-tax profit of NZ$5.63 million in the second year.
It is time national governments viewed their flag carriers as profit-making enterprises to serve its people first rather than as symbols of national pride, meant to be kept flying at any cost.
More importantly, they should put an immediate stop of their free and discounted use by elected representatives and board members for junkets. It is not uncommon to find nationally-owned airlines in the Pacific Islands to have just one jet but a very big board to run it. The reasons for such a bloated management board are only too obvious.
The regional jet is changing the rules of the game all over the world because of the economies of scale that it offers. Virgin Pacific acquired about a dozen of E-Jets since last year and has begun flying them in Australia. In addition, it has also announced flights within New Zealand from November. Their announcement of the extra low domestic fares has forced Air New Zealand to follow suit and match those prices.
It is a question of time when more of these planes will be deployed in the Pacific Islands. It is imperative that some national airlines that fly outdated, ageing equipment will be forced to consider the public private route to ensure both the survival and growth of air services to and from their destinations, much like Samoa did.
Air Vanuatu, incidentally one of the airlines that has a bloated board when compared to its miniscule fleet and operations, is seriously considering going down that path. It made an announcement to that effect last month. Samoa’s success is bound to enthuse other national airlines in the region. After all, it has turned a win-win situation for all stakeholders: the joint owners of the airlines, the nation’s people and tourists—who enjoy low rates and a professional service ethic—and, of course, the country’s tourism industry with better connectivity.
But, on the other hand, in the past few months stark commercial considerations have seen established competing airlines coming together in codeshare arrangements (even though belonging to rival alliance partner groups) to allegations of cartelisation in a region where the cost of air travel is already among the highest in the world.
Such moves have rendered the spirit of regional instruments like PIASA (Pacific Islands Air Services Agreement) quite useless, even as countries part owning these successful airlines refuse to sign it.
In anticipation of United States’ increased interest in the region, there is already news of that country’s airlines flying more frequently into the South Pacific.
This is excellent news for the entire region’s tourism industry and its promotion as a collective brand as proposed by south-pacific.travel a few months ago.
This a great opportunity for the region’s airlines to cooperate with public private partnerships if need be, to establish better inter-island links using smaller, more economical equipment that is now available. This will not only serve the regional tourism industry better, but also go a long way in giving a much needed boost to inter-island business and trade.
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