Airlines of the South Pacific islands have had one of their best years ever, led by Fiji's Air Pacific. Two of the region's chronic losers are showing profits, but the scene at Air Niugini stays turbulent.
Fijian flag carrier Air Pacific had a record year, posting a FJ$13.2 million ($6.6 million) net profit - a 60% rise over the previous year. The airline, whose financial year ran to March 1999, gained from a devaluation of the Fiji dollar, restructuring and a boost in flights to key markets in Australia and North America. It also added codeshares with several big carriers, including American Airlines.
Fiji's prime minister, Mahendra Chaudhry, has quashed proposals to privatise Air Pacific, which is 51% owned by the Fijian government, with 46% held by Australia's Qantas Airways. Chaudhry, who took office in May, is known to be less keen on privatising state companies than was Fiji's previous government.
Two of the region's former basket cases, Polynesian Airlines and Air Nauru, will also report profits for the year ending 3 June. Polynesian's 1994 losses and debt almost bankrupted its owner, the government of Samoa. But the airline has made a remarkable comeback with new management and has enjoyed its fourth straight year of profit.
Polynesian ended this year with a $1 million profit on $27 million in revenue. Air Nauru expected a slightly smaller profit of $700,000. It has rung up some of the South Pacific's biggest airline losses but started to improve last year with new managers and a profitable wet lease for flights between Australia and Norfolk Island.
Several other island carriers did less well. Both of Air Vanuatu's aircraft were damaged during the year. Its leased Saab 2000 was involved in three separate ground incidents, but through no fault of its own. Then the airline's only Boeing 737 was at Sydney airport during a freak hail storm in April. Insurance covered only half the hull damage and none of the lost revenue. Air Vanuatu has not released results, but is expected to have lost $4-6 million.
Solomon Airways, Royal Tongan Airlines and New Caledonia's Air Caledonie International have also not reported results.
Papua New Guinea flag carrier Air Niugini has the dubious distinction of being the South Pacific's most troubled airline. Not only did the Asian currency crisis and devaluation of the Papua New Guinea kina hammer its performance, but the country's leadership has been in turmoil, with direct consequences for the government-owned carrier.
In mid-July, the government suspended Air Niugini's managing director, Andrew Ogil, only to reinstate him a week later. No reasons were given for either move. In early August, engineers went on strike over unpaid wage rises, so Ogil sacked all 96 local engineering workers. He said the airline could rely on expatriate engineers and outsourced maintenance to continue operations.
Air Niugini has not released results for some time, but local papers say the dispute was due to cashflow problems. Despite such turmoil, the government is preparing to privatise Air Niugini.
Source: Airline Business
