A proposed single aviation market between Pacific island nations and Australia and New Zealand has received a setback by Fiji's decision to opt out of it.
The Pacific Islands Air Services Agreement (PIASA), drafted on behalf of governments in the region, was first offered for signature in August at the annual Pacific Island Forum meeting of government heads in Auckland. PIASA proposes open skies, including fifth and sixth freedoms, between all nations that sign the accord.
It could replace up to 67 bilaterals that now govern air travel within the region. More importantly for small island nations with limited capital, it would ease foreign ownership limits by allowing them to pool investment in jointly-owned airlines.
Fiji chose not to sign due to concerns that the deal would allow Australian and New Zealand airlines to dominate. Fiji and New Zealand have a history of aeropolitical tension. Karam Chandra, Fiji's civil aviation director, told Airline Business's sister on-line publication Air Transport Intelligence: "Open skies agreements appear to have run their course and many have found that the benefits that were loudly proclaimed do not, in reality, occur."
Chandra goes on to warn: "The largest carriers retain or grow their strength at the expense of the small because major multinationals that have more resources have been able to force out local airlines."
Fiji's opt-out is a setback, because its location makes it a transport hub among Pacific islands. Yet, it is still possible that PIASA may take effect. Four island nations (the Cook Islands, Nauru, Tonga, and Vanuatu) signed in August and at least one other (Solomon Islands) has expressed an interest. Six are needed for PIASA to take effect.
Australia's prime minister, John Howard, is pressing for shared airline ownership and operation among Pacific island nations, and Australia is funding a study on ways to do it.
Source: Airline Business
