SOLOMON ISLANDS: Airline ground due to missed payments
Updated
Solomon Airlines has suspended its international flight operations, after the company which leased it its Embraer 170 jets grounded the plane, after the airline failed to meet its payments. The aircraft is the airline's only international jet and it began operations in May this year, replacing an older, larger, 737 aircraft. The Solomons Government has already paid three million dollars US to support the airline's operations, but this is the second payment missed. But what is happening in Solomon Islands is an example of what has happened across the region, in nations which are determined to have a national carrier as a matter of pride, despite growing evidence doing so is unviable. The news about Solomon Airlines comes as the government of Vanuatu confirms it will be selling its remaining share in Air Vanuatu, allowing it to become completely privatised. What is the future of international air services in the region?
Presenter: Campbell Cooney
Speakers: The Managing Director of the Centre for Asia Pac Aviation, Peter Harbison
HARBISON: Not in the least, that has tragically been the story for Solomons aviation for many, many years and for that matter for a number of other countries in the region where you've had sporadic involvement in the airline sector either with an owned national aircraft or leased national aircraft operating as a national airline, or as in the case of the Solomons now of effectively a chartered operation.
COONEY: We've been hearing talk coming out of the Pacific Island Forum and the Trade Ministers meeting about more cooperation between countries to use the resources that each country has for air transport rather than each country having their own, now in my short memory this has been talked about for a long time but they've never got their act together to do anything about it?
HARBISON: Well yes I think to go back even further in fact the governments did do something about it a long, long time ago and Air Pacific initially was going to be the airline that would provide service to a number of different countries, small island states, and it was for a long time jointly owned by a number of them to provide service in that way. Part of the problem with it was that each of the countries of course wanted their particular level of air service and when they didn't get it they became dissatisfied, and to operate as a reasonably commercial airline you obviously tend to some extent to concentrate on the routes that pay money. So there is a bit of an imbalance there in terms of putting things together. Another process been used internationally between the states has been to try to develop a more liberal aviation system, for example there is a multilateral air services agreement which progressively leads to open skies between each of the countries. And in that environment you can have airlines which actually can choose commercially and don't have all the constraints of sort of national intervention and nationalism that cut across good commercial rules. But unfortunately that has been stymied mainly sadly to say by Fiji and Air Pacific which is very much opposed to the idea of open skies because it considers that Air Pacific would perhaps be open to more competition in that respect.
COONEY: So they're saying it's not going to work if it's not us who's going to be doing it?
HARBISON: Basically I think that's pretty much it yes.
COONEY: There are many other island nations in the Pacific and I'm sure in other parts of the world as well where air service is the only way you can get anything or anyone to it, but they're not great tourist destinations. I'm thinking of places like Kiribati and Nauru which do have airlines which are subsidised and this is the concept, but even it has cut back its services to places like the Marshall Islands because they just can't make it viable?
HARBISON: Yes, there's a danger of course of lumping each of the different states together and saying well they all have the same problem, and you're quite rightly pointing out one of the big differences which is that tourism flows can actually help you considerably to make the economics of an air route work. A lot of the tourism flows of course are not Australians going to lie on the beach, for example in New Zealand they are actually locals moving to and fro between the countries that they tend to live in, Australia or New Zealand, and that is where the vast bulk of course of air services is between Australia and New Zealand and the different states themselves. But island states, small entities like Nauru, Kiribati, Tuvalu, they all can be serviced, in fact Air Nauru which is now an airline, its ancestor used to be the one which actually provided those connections very, very effectively by doing a triangulation through those states down to Fiji for example. And some of those routes actually paid reasonable money, they were to some extent subsidised by the countries involved but the bottom line was that it actually worked fairly well. And that I think in some ways goes back to what you were talking about before, the concept of having a sort of commonly agreed operation, whether that carrier is the right one to do it is a whole other question.
COONEY: I'm also curious Peter Harbison what you've heard about talk between Fiji and Emirates Airlines about them making that one of their destinations and putting a lot of air services in there based around the fact that they will be building, or the United Emirates will be building a fuel refinery centre there. Now is this true, do we know about this being anything more than rumour and speculation?
HARBISON: Well the answer to that is no, I have no information on that. I must say I'd be somewhere north of extremely surprised if that were on Emirates agenda in terms of the different options it has around the world for airline operations. But then the airline business is a strange one, I would have to say that.
