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.

Air New Zealand reviewing services beyond RAR, TBU and APW to LAX

Television New Zealand and the Samoa Observer are carrying reports dated 26 October 2008 that Air New Zealand is seeking government subsidises if it is to continue its weekly services beyond Nuku'alofa, Apia and Rarotonga to Los Angeles.

The non-stop service between Rarotonga and Los Angeles is already subsidised by the Cook Islands government.

Air Vanuatu restructuring?

The Government of Vanuatu still has a web site up for the proposed restructuring of Air Vanuatu. Expressions of Interest were due by 7 March 2008. I have not seen any progress reports.

The same consultants, International Finance Corporation (a member of the World Bank Group), advised the Government of Samoa on the future of Polynesian Airlines which lead to its downsizing and the creation of Polynesian Blue in 2005.

PIASA enters into force following ratification by Niue

The Pacific Islands Forum Secretariat web site indicates that the Pacific Islands Air Services Agreement UPDATED (PIASA) entered into force on 13 October 2007 following ratification by a sixth Pacific Islands country, Niue.

The initial parties to the PIASA are the Cook Islands, Nauru, Niue, Samoa, Tonga and Vanuatu (see also previous posting on 16 May 2007).

Niue signs the PIASA

The Fiji Daily Post reported on 19 March 2007 that Niue has signed the Pacific Islands Air Services Agreement (PIASA). The PIASA needs six countries to ratify it before it comes into force. So far it has been ratified by the Cook Islands, Nauru, Samoa and Tonga. Along with Niue, Kiribati, Papua New Guinea, the Solomon Islands, Tuvalu and Vanuatu have signed but have yet to ratify the treaty.

I attended the negotiation of this agreement in Fiji and Tonga.