Earlier, Islands Business published a very comprehensive report on prospects for tourism from China, now with twice weekly Air Pacific flights Nadi-Hong Kong; a collaborative code-sharing arrangement with Cathay Pacific (and links to Europe, the Middle East, SE Asia and within China itself) and a new office in Shanghai. Government's 2010 Budget set aside $23.5m to market tourism.
All worthy initiatives and well worth publishing but why has there been no media editorial or column comment on the implications of Qantas's intended sale of the 48% it owns of Air Pacific, Fiji's international airline 51% owned by Government? The airline has opened up routes , or entered code-sharing arrangments, that should see more tourists from America, China and Guam, but it has closed its Japan service, and competition from budget airlines V Australia and Qantas-owned Jetstar could see the national carrier lose out on the lucrative Australia-Fiji route. More planes and cheaper fares on that route mean more tourists, but the more cheap flights that compete with Air Pacific, the less tenable the national carrier, and the fewer tourist aircraft dollars retained by Fiji. To compound the issue, Qantas will use the sale money to buy more Jetstar planes.
5 comments:
An article suggesting the Government should stop Qantas from off loading it's shares until the Global Crisis is over was quashed by the censors at Fiji Times.
If so, the censors and the Government were ill-advised. This sort of issue needs to be openly discussed, and expert financial opinion sought. Vinaka for bringing this to my attention.
Aside from the stupendous loss in its last financial year (mostly due to Air Pac Management's idiotic decision to lock in a year's worth of fuel at prices when oil was at a historical high), Air Pacific has been quite a profitable airline (one of the few in the world in recent years that managed it).
I have no doubt that they can continue to be one... how can they not be when they charge more, and pay workers less? (Ok, that's another dig).
It may have to restructure, or do things different, but whatever it is they do, they can not just throw their arms in the air and say "poop, let's give up."
Getting control of Air Pacific should be on the cards for the government of Fiji, simply because of Qantas' veto power despite owning less shares... an unheard of concession anywhere else in the world.
As things stand, this is a buyers market... what Fiji shouldn't do is even contemplate buying at seller's market prices which Qantas is trying to get them to do.
Qantas wants to sell out of Air Pac as they now want to push with Jetstar. However the Govt of Fiji doesn't have to purchase from the minority shareholder and there are not too many buyers in the market currently. IMy guess is that they are stuck with it.
The additional airlines going to Fiji is great for Fiji including jetstar. Yes Air Pacific will struggle due to the increased competition but as someone has rightly pointed out they have strong competitive advantage in a much lower cost base for labour. Air Pac will need to restructure and reduce wastage and costs to compete but this increased copetition is one of the great outcomes for Fiji.
Airfares to Fiji are now $400 return from Australia to Fiji including taxes off peak and between $500 to $600 during peak. This will have a huge benefit for tourism in Fij - greater than what most people have realised.
We all still want our beloved Air Pac to survive and with good management they still can. I hope the people of Fiji (current and former) also do their bit and fly Air Pac when going to Fiji.
Just booked a ticket to Fiji $400 return in mid Feb... unbelievable
WE have been ripped off for too long by Air Pac/Qantas monopoly - $1,000 for a 4 hr flight was just too much
I can see a lot more short trips to Fiji coming up - time to chill the Fiji Bitter
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