Book Reviews | Gordon Campbell | News Flashes | Scoop Features | Scoop Video | Strange & Bizarre | Search

 


Cuts Cause Rethink Over Polynesia Blue Air Deal


Polynesian Blue Service Cuts Force Pacific Governments To Rethink

By John Andrews - www.pacificinsights.com

Planned changes for Samoa’s air services have prompted a strategic rethink by airlines and governments in the South Pacific. The pending demise of Polynesian Airlines’ international jet operations in favour of Polynesian Blue, a recently announced joint venture between the Samoan government and Virgin Blue, means other airlines are eyeing consequent opportunities in the region.

Aviation industry sources suggest Polynesian Blue will not provide a twice-weekly service via Niue as its Samoan government-owned predecessor has done for the past three years. The revamped airline may also cut Tonga and Honolulu from its schedules.

In what was the third official start up date announcement this year, Samoa’s Prime Minister Tuilaepa Aiono Sailele Malielegaoi has revealed that Polynesian Blue would begin flights between Samoa, New Zealand and Australia as from the end of October.

Aware of the likelihood Niue is about to lose its sole scheduled international service, the tiny island’s Premier, Young Vivian, is adamant his government wants a regular jet link with New Zealand.

Niue, he says, is not interested in having just a feeder service between Apia, Samoa’s capital, and his island of 1200 people.

In his view, a feeder service using a turbo-prop Dash 8 aircraft, possibly available through Polynesian’s yet to be named domestic arm, could represent the death knell of Niue’s sorely pressed tourism industry.

The lack of a direct New Zealand-Niue link would have serious implications for economic development.

Officials of New Zealand’s Ministry of Foreign Affairs have been talking with several airlines possibly interested in providing air services between Tonga, Niue and Auckland. Airlines said to be considering such options are Fiji’s Air Pacific, Air New Zealand, Qantas and Virgin’s Pacific Blue.

The flagged transfer of Polynesian Airlines jet services to Polynesian Blue has thrown up some tough issues for the Samoa government, its flag carrying airline and the airline’s staff.

Industry analysts expect that about 150 employees, some of them long serving, will lose their jobs. Most of those lost will be in Samoa but Polynesian also has about 40 staff in offices in New Zealand, Australia, Hawaii and Tonga. Many of them are expected to be affected.

All of Polynesian’s 15 or so jet pilots are expected to be offered contracts with the new airline but they will have to shift to Polynesian Blue’s Auckland base and be prepared to fly for both Virgin Blue’s subsidiary Pacific Blue as well as Polynesian Blue.

It is also understood that only about a third of Polynesian’s cabin crew can expect to obtain positions in Auckland with the new airline. Polynesian Airline’s Apia-based turbo-prop pilots, and most of its engineering and ground handling staff however, appear likely to keep their jobs.

Ticket sales by credit card over the internet is one of the prime reasons why Virgin Blue can offer attractively cheap fares. The cut price airline’s management may have been surprised to learn during their prolonged negotiations with Samoa over the merger that the vast majority of Samoan fare-paying-customers are not computer savvy.

In true Pacific Way style, they prefer to pay cash face to face with an airline or travel agent. With this aspect in mind, it is understood the merger parties have agreed to retain Polynesian Airlines sales counter staff to provide a service for Polynesian Blue.

The thorny question of redundancy packages is believed to be foremost in the minds of Polynesian staff, management and the Samoa government. It is understood that officials are working through the issue.

The industry analysts suggest the Samoa government is caught between “a rock and a hard place”. They say that, in common with other Pacific island states, it had to do something to reduce the financial risks of supporting a national carrier.

Regardless, the government still stands to lose millions of dollars even after the joint venture proceeds as negotiated.

The joint venture arrangements involve the return of Polynesian Airlines’ sole Boeing 737-800 aircraft, which is said to be a hugely expensive exercise. The longer it takes to return it to its owners, the bigger the debt the government faces.

Other hurdles the government almost certainly has to overcome are the associated costs of concluding support maintenance and spares arrangements for the Boeing aircraft.

One industry economist said an oft neglected effect of such deals involved the impact of job losses and reductions for some local business generated in Samoa by its home-based flag carrier.

The so-called ‘trickle-down’ effects from reduced taxes and duties, reduced consumption expenditure and the like, result in a leakage of government and private sector revenue – much of it moving offshore.

The economist suggested the Samoan government should consider all such losses would be more than offset by its reduced financial exposure to a highly volatile and costly business.

Ends


© Scoop Media

 
 
 
 
 
Top Scoops Headlines

 

Werewolf: Living With Rio’s Olympic Ruins

Mariana Cavalcanti Critics of the Olympic project can point a discernible pattern in the delivery of Olympics-related urban interventions: the belated but rushed inaugurations of faulty and/or unfinished infrastructures... More>>

Live Blog On Now: Open Source//Open Society Conference

The second annual Open Source Open Society Conference is a 2 day event taking place on 22-23 August 2016 at Michael Fowler Centre in Wellington… Scoop is hosting a live blog summarising the key points of this exciting conference. More>>

ALSO:

Buildup:

Gordon Campbell: On The Politicising Of The War On Drugs In Sport

It hasn’t been much fun at all to see how “war on drugs in sport” has become a proxy version of the Cold War, fixated on Russia. This weekend’s banning of the Russian long jumper Darya Klishina took that fixation to fresh extremes. More>>

ALSO:

Binoy Kampmark: Kevin Rudd’s Failed UN Secretary General Bid

Few sights are sadder in international diplomacy than seeing an aging figure desperate for honours. In a desperate effort to net them, he scurries around, cultivating, prodding, wishing to be noted. Finally, such an honour is netted, in all likelihood just to shut that overly keen individual up. More>>

Open Source / Open Society: The Scoop Foundation - An Open Model For NZ Media

Access to accurate, relevant and timely information is a crucial aspect of an open and transparent society. However, in our digital society information is in a state of flux with every aspect of its creation, delivery and consumption undergoing profound redefinition... More>>

Keeping Out The Vote: Gordon Campbell On The US Elections

I’ll focus here on just two ways that dis-enfranchisement is currently occurring in the US: (a) by the rigging of the boundary lines for voter districts and (b) by demanding elaborate photo IDs before people are allowed to cast their vote. More>>

Ramzy Baroud: Being Black Palestinian - Solidarity As A Welcome Pathology

It should come as no surprise that the loudest international solidarity that accompanied the continued spate of the killing of Black Americans comes from Palestine; that books have already been written and published by Palestinians about the plight of their Black brethren. In fact, that solidarity is mutual. More>>

ALSO:


Get More From Scoop

 
 
 
 
 
 
 
Top Scoops
Search Scoop  
 
 
Powered by Vodafone
NZ independent news