Pacific Islands countries underwrite Air New Zealand operations to maintain direct links to LAX

In October 2008, with the price of jet fuel still near record levels, Air New Zealand made it clear that it would need financial support if it was to maintain what had become unprofitable air links between the Cook Islands, Samoa and Tonga, and Los Angeles (LAX)(see previous post).

On 24 November 2008 Radio New Zealand International reported that the Cook Islands Government had agreed to continue providing Air New Zealand with an underwrite for its RAR-LAX service.

On 20 February 2009 the New Zealand Minister of Foreign Affairs, Hon. Murray McCully, announced in a speech that the New Zealand Government (through NZAID) had agreed to help the Samoan and Tongan governments with underwrites to maintain the TBU-APW-LAX air links.

"... That means we need to be hard-headed in our focus on those initiatives that will contribute to sustainable economic growth.

"A good example is the provision of air services and shipping services - the arteries for tourism and trade.

"Recently the Samoan and Tongan governments requested support from the New Zealand government in retaining the Los Angeles link that is so vital to tourism traffic from the United States and Europe.

"We have agreed to an underwrite for the next year while we focus on longer-term solutions in this area.

"If we can't maintain the essential services that make trade and tourism possible, the rest of the debate is futile."

On 9 March 2009 Radio New Zealand International reported that on this development, quoting comments made by the New Zealand Prime Minister, Hon. John Key. On 10 March 2009 Radio New Zealand International reported on reaction from the Cook Islands Government.

On 18 March 2009 the Samoa Observer reported that the Cook Islands Government was concerned that the New Zealand Government was not also supporting it with its underwrite, together with comment from the New Zealand Minister of Foreign Affairs.

Government support for air services to remote communities is not unprecedented, with the United States having a comprehensive essential air service (EAS) programme, while Australia has a Remote Air Service Subsidy (RASS) scheme and in Europe there are public service obligation (PSO) air routes (Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra-Community air routes refers).

Air New Zealand has already been providing a weekly B737 service to tiny Niue with an underwrite.