Real Tonga CEO Tevita Palu said today the Tongan market was too small to support another airline.
Palu was responding to a suggestion by Prime Minister ‘Akilisi Pohiva at a meeting yesterday that the kingdom should have another airline to compete with Real Tonga.
“There is not enough work locally to support two local airlines,” he said.
Palu said criticism of Real Tonga’s pricing structure was unfair since it was made against Air New Zealand.
“Fare comparison is done on a seat basis,” he said.
“We cannot compare airfares on a B777 aircraft carrying over 350 passengers operating on a market of four million people with a small aircraft carrying 30 passengers operating on a limited market of 100,000 people.”
He said airfares in Tonga could be reduced by having lower fuel prices, localisation of pilots and engineers, better airports and weather forecast systems, fewer taxes and better regulatory support from the government.
Palu denied claims that the MA60 and Y12 aircraft the government leased to his airline were provided cheaply by international standards.
Former government Civil Aviation Minister Etuate Lavulavu, said they were leased out at $1500 per hour.
“Under what basis does the government think the lease is cheap?” Palu asked.
“Our current lease rate is more expensive that normal commercial lease compare to similar capacity aircraft type.”
The Prime Minister said the government rate was designed to subsidise airfares, including the flight to the Niuas. Real Tonga operates a weekly service, charging TP$344 to Niuafoou and TP$269 to Niuatoputapu from Vavau.
Palu said there had been TP$11.50 ($10 airport levy plus CT) fare adjustment which is on the Vava’u sector in January this year.
MP Akosita Lavulavu complained that she had been charged the new passenger tax for each of four sectors of a flight from Tongatapu to Vava’u.
She said Real Tonga told her that because the aircraft landed in Ha’apai before Vava’u, charges were made for two sectors on the outward and returns legs of the journey.
In December last year the government refused an operating license to Tonga Airways.
Tonga Airways was a partly Tongan, partly foreign owned venture which said it would bring cheaper airfares to Tonga.
Last month Real Tonga sent a chartered plane back to Australia after it has not been used for three months because of a fall in demand.
Tonga Radio said more people were understood to sailing between the islands after improvements in services and cheaper fares.
The main points
- Real Tonga CEO Tevita Palu said today the Tongan market was too small to support another airline.
- Palu was responding to a suggestion by Prime Minister ‘Akilisi Pohiva at a meeting yesterday that the kingdom should have another airline to compete with Real Tonga.
- “There is not enough work locally to support two local airlines,” he said.
- Palu said criticism of Real Tonga’s pricing structure was unfair since it was made against Air New Zealand.
