APW-LAX was mentioned a few weeks ago, but it looks like LAX-TBU will go as well (I believe the route was operated as TBU-APW-LAX)
Basically it looks like the Tongan government screwed Samoa over by deciding to terminate their part of subsidizing the route. Service will end with the last westbound flights on Jan 25, 2011
I wonder how much longer Rarotonga will last? It will be the last remaining 763 route out of LAX for NZ
As a side note, I wonder if Air Pacific would be interested in serving APW-LAX as they have already started APW-HNL with a subsidy.
koruman From Australia, joined Feb 2006, 2980 posts, RR: 6 Reply 2, posted (2 years 6 months 1 week 1 day 13 hours ago) and read 8676 times:
Actually it is a much more sordid story than this.
The governments of Tonga and Samoa (combined population 283,000, combined economy of $1.7 billion) were given an ultimatum by Air New Zealand to double their subsidy of the route to $4 million or lose the service. Air New Zealand's rationale was that the breakeven load is 65%, while actual loads have been 60%.
The two governments sought private sector support (hotels like Sinalei and Coconuts depend upon North American guests, as Kiwi and Aussie tourists prefer cheaper accommodation), and reached a total of $2.7 million by deadline day, at which point Air New Zealand pulled the plug.
This made it clear that every major Samoan hotel (the two listed above plus the two Aggie Greys hotels) face certain bankruptcy, and at that point the Samoan government agreed to find the additional $1.3 million, most likely through Church donations in New Zealand. They went back to Air New Zealand within 48 hours of the expiry of the original Air NZ ultimatum and agreed to underwrite the new, doubled $4 million subsidy, only for Air New Zealand managment to tell them that the deal is off the table.
There is one bright spot in the story. When the tsunami hit 15 months ago NZ Prime Minister John Key visited the affected areas, including the stricken Sinalei and Coconuts resorts, the former of which saw its proprietor killed. He made lasting bonds and links at that time, and it is widely expected in Samoa that his ire is likely to fall upon Air New Zealand for its un-neighbourly behaviour.
SurfandSnow From United States of America, joined Jan 2009, 2588 posts, RR: 31 Reply 3, posted (2 years 6 months 1 week 1 day 12 hours ago) and read 8548 times:
This cut was already loaded a few weeks ago and discussed in the enilria thread.
This route had been on the chopping block a few years ago and was saved by the subsidy, since both countries were eager to maintain their crucial links to the U.S. market. I think that's why FJ was courted to start APW-HNL flights, which have apparently done well. Now the loss of the LAX flights won't be as big a deal - Samoa actually has more frequent service to the U.S. than ever before! As for Tonga, they were served one-stop via APW, and it's not asking much to have the stop be in NAN (on a connecting FJ itinerary) rather than APW.
Flying in the middle seat of coach is much better than not flying at all!
aerokiwi From New Zealand, joined Jul 2000, 2410 posts, RR: 4 Reply 4, posted (2 years 6 months 1 week 1 day 12 hours ago) and read 8436 times:
Quoting koruman (Reply 2): Actually it is a much more sordid story than this.
I'm sorry, how is this "sordid"? It sounds to me as if a company requested a government subsidy to justify maintianing an unprofitable service. By the time the repective governments got into gear, the airline had obviously decided it wasn't worth the hoopla. Sounds fairly standard to me. Sordid implies some sort of sinister motivation to royally screw the other party over, or corruption of some kind.
Though I admit it's a shame the route has gone. It was a popular choice for round-the-world ticket hodlers from Europe, though I suspect they were fairly low yielding anyway. And a diversion to Nadi for LA flights shouldn't be a big deal if Air Pacific can get its connecting schedules sorted.
FlyPNS1 From United States of America, joined Nov 1999, 6049 posts, RR: 25 Reply 5, posted (2 years 6 months 1 week 1 day 9 hours ago) and read 8189 times:
Is the 1x weekly LAX-RAR route subsidized?
I've actually considered taking it as a stopover on my way to New Zealand, but I wonder how much longer it will last.
sq_ek_freak From United Kingdom, joined Dec 2000, 1583 posts, RR: 21 Reply 6, posted (2 years 6 months 1 week 1 day 3 hours ago) and read 7354 times:
Quoting aerokiwi (Reply 4): I'm sorry, how is this "sordid"? It sounds to me as if a company requested a government subsidy to justify maintianing an unprofitable service. By the time the repective governments got into gear, the airline had obviously decided it wasn't worth the hoopla
While I agree with you, meeting the deadline within 48 hours of expiry and NZ still refusing to honor it does seem a bit harsh, no? Especially with such dire implications to the local tourist industry?
NZdsgnr From New Zealand, joined Jul 2008, 259 posts, RR: 0 Reply 7, posted (2 years 6 months 1 week 1 day 3 hours ago) and read 7237 times:
Quoting koruman (Reply 2): Actually it is a much more sordid story than this.
Not doubting anything but I would love to have a source.
so far all i could read in the provided link in the thread starter was that "However Tonga’s government pulled out, refusing to help make up any of the financial short falls that the airline suffered as a result of the route"
"Samoa’s Prime Minister has confirmed that the New Zealand Government has agreed to subsidise losses for one year, on Air New Zealand’s Apia to Los Angeles weekly flight."
The slight puzzle to me is that Virgin Blue/Polynesian Blue isn't in on this, since Poly Blue is majority owned by Samoan interests - the Samoan government and Aggie Grey Hotels.
The Samoan government can request that Poly Blue fly specific routes, but would become liable for any shortfall in agreed revenue.
I assume it is an available or appropriate aircraft issue.
NZdsgnr From New Zealand, joined Jul 2008, 259 posts, RR: 0 Reply 9, posted (2 years 6 months 1 week 1 day 3 hours ago) and read 7074 times:
Thanks Mariner but I was more looking for a source for the claims Koruman has regarding:
Quoting koruman (Reply 2): The governments of Tonga and Samoa (combined population 283,000, combined economy of $1.7 billion) were given an ultimatum by Air New Zealand to double their subsidy of the route to $4 million or lose the service. Air New Zealand's rationale was that the breakeven load is 65%, while actual loads have been 60%.
The two governments sought private sector support (hotels like Sinalei and Coconuts depend upon North American guests, as Kiwi and Aussie tourists prefer cheaper accommodation), and reached a total of $2.7 million by deadline day, at which point Air New Zealand pulled the plug.
This made it clear that every major Samoan hotel (the two listed above plus the two Aggie Greys hotels) face certain bankruptcy, and at that point the Samoan government agreed to find the additional $1.3 million, most likely through Church donations in New Zealand. They went back to Air New Zealand within 48 hours of the expiry of the original Air NZ ultimatum and agreed to underwrite the new, doubled $4 million subsidy, only for Air New Zealand managment to tell them that the deal is off the table.
"Oxfam slams Air NZ request for higher US-Pacific subsidies"
And of course, it is true, canceling the routes will have a negative effect on the islands, if only for tourism and the tuna industry.
But at the same time, there is a question of whether Air New Zealand is to be a commercially viable airline or whether it is a subsidized service provider.
There are elements of both, of course. It is a tricky balancing act and to some extent it depends on one's own agenda.
sectflyer From United States of America, joined Oct 2008, 359 posts, RR: 0 Reply 13, posted (2 years 6 months 1 week 20 hours ago) and read 4952 times:
Delta needs to get in on a US to New Zeland route!
Quoting aerokiwi (Reply 4): I'm sorry, how is this "sordid"?
It's sordid because these are our little neighbours, and the government of Samoa came back within 48 hours agreeing to all of Air New Zealand's financial demands, only for Air NZ to say "sorry, too late, we've taken the offer off the table". I repeat, the government of Samoa agreed to underwrite the route to the full amount identified by Air New Zealand, but Air New Zealand rejected its acceptance of their own offer.
That is just despicable and contemptible behaviour from an airline which has annual revenue more than double than the combined GNPs of the two nations.
It also takes a damned cheek to subject small island destinations to a need to subsidise these flights when the Business Premier and Premium Economy cabins on Air New Zealand's AKL-PVG and AKL-PEK show comical levels of unsold inventory. If the management of Air NZ are not hypocrites they should write a nice little letter to the head of state of the People's Republic of China threatening him with their intention to close those routes unless the government of the PRC buys those unsold seats. Oh sorry, I forgot, people only bully people smaller and weaker than themselves.
I have long had doubts about the ethics and morality of Air New Zealand's senior management and they were certainly reinforced by the way they have thrown Samoa to the dogs in spite of its acceptance of the airline's terms. I'm not asking for the airline to become a charity: it does awfully well from Samoa to the extent that it operates 747 aircraft there at Christmas, and they needed only to show some flexibility.
If and when the individuals involved leave aviation they could always consider a career running protection rackets, but they need to learn that when you give your victim a sum you require them to pay you are actually supposed to protect them when they agree to your demands.
kiwiandrew From New Zealand, joined Jun 2005, 8435 posts, RR: 15 Reply 15, posted (2 years 6 months 1 week 19 hours ago) and read 4660 times:
Quoting koruman (Reply 14): I have long had doubts about the ethics and morality of Air New Zealand's senior management and they were certainly reinforced by the way they have thrown Samoa to the dogs in spite of its acceptance of the airline's terms . If and when the individuals involved leave aviation they could always consider a career running protection rackets, but they need to learn that when you give your victim a sum you require them to pay you are actually supposed to protect them when they agree to your demands.
I think that you will find that responding within the correct timeframe was actually part of the terms - they did not do this so they did not meet the terms.
I am unclear why you seem so determined to blame Air New Zealand for the inability of the Samoan Government to get their act together . In any case there are a number of other airlines out there which the Samoan/Tongan Governments can approach .
Moderation in all things ... including moderation ;-)
koruman From Australia, joined Feb 2006, 2980 posts, RR: 6 Reply 16, posted (2 years 6 months 1 week 19 hours ago) and read 4646 times:
Quoting kiwiandrew (Reply 15):
I am unclear why you seem so determined to blame Air New Zealand for the inability of the Samoan Government to get their act together
Because they have no money - where on earth do you think they are going to conjure it out of? The private sector only came to the party at the last minute when they realised the economic armageddon which Air NZ's withdrawal would unleash.
mariner From New Zealand, joined Nov 2001, 22711 posts, RR: 88 Reply 17, posted (2 years 6 months 1 week 18 hours ago) and read 4555 times:
Quoting koruman (Reply 14): If and when the individuals involved leave aviation they could always consider a career running protection rackets, but they need to learn that when you give your victim a sum you require them to pay you are actually supposed to protect them when they agree to your demands.
I wasn't going to contribute to this thread again, but I think that is pure hyperbole. This is a long running issue:
Quoting koruman (Reply 16): Because they have no money - where on earth do you think they are going to conjure it out of? The private sector only came to the party at the last minute when they realised the economic armageddon which Air NZ's withdrawal would unleash.
So they found the money.
As noted, previous subsidies for this service have been paid by the people of New Zealand. I have no problem with this, I encourage aid to the islands - but not if private money is sitting laughing in the bank because of my taxes.
mariner From New Zealand, joined Nov 2001, 22711 posts, RR: 88 Reply 19, posted (2 years 6 months 1 week 18 hours ago) and read 4490 times:
Quoting TheCommodore (Reply 18): If it wasn't for this aid money, the country would cease to exist really.
Sadly, that is true of most of the island nations, and as much as I approve of aid to these countries I think there has to be some financial reality to it.
I think that things like health, education and the public welfare have a greater priority than this.
Yes, tourism is essential to the islands, but, as noted, the government of Samoa can request Polynesian Blue - in which they have a majority financial interest and which is the effective national carrier - to provide services.
NZdsgnr From New Zealand, joined Jul 2008, 259 posts, RR: 0 Reply 23, posted (2 years 6 months 1 week 18 hours ago) and read 4361 times:
so what I can read is they pulled out, NZ cancelled the flight and they changed their mind 2 days later. What I can see they tried to gamble, their bluff didn't work and now they are crying.
It is sad but NZ is in the business of making money. and they have better horses to flog than a charity. tough. yes but life isn't easy
koruman From Australia, joined Feb 2006, 2980 posts, RR: 6 Reply 24, posted (2 years 6 months 1 week 18 hours ago) and read 4355 times:
American Samoa has virtually zero tourism with only HNL flights, to the point that the former InterContinental hotel is now a rotting hulk. Without LAX flights from a carrier which can also deliver thru pax from Europe it is fair to say that Sinalei and Coconuts are doomed. And with them would go 30% of visitor spending.
25 Zkpilot: Whilst this is terrible for the islands, I tend to agree that K'man is taking things to hyperbole just a little too much... I think perhaps a certain
26 TWA902fly: From what I know about Hawaiian's service to PPG... it is also subsidized and frequently not very full. I might be wrong though. If I was HA though,
27 LAXintl: Good for NZ. They have a larger commercial business to run, not being a charity line to help out miscellaneous islands with an odd flight here or ther
28 MillwallSean: Problem is that why would the Samoans need a route to Hawaii? The tourists don't go from Hawaii to Samoa its out of the way and the people flying int
29 mariner: Because HNL's better than nothing - which is what they're going to get. It is all Polynesia and maybe the O&D tourists don't go from Hawaii to Sa
30 MillwallSean: I very much disagree with that, the tourists those two resorts are after will not come from the US through Hawaii to Samoa. To long detour and it doe
31 NZdsgnr: The reason why they keep on subsidising TN is that it is one of the biggest employers... How would it lookif you were to close the doors on 800 emplo
32 TWA902fly: I don't see how a link to Tahiti would be logistically any different than a link to Hawaii... If you're going to/from Samoa... HNL and PPT are both j
33 NZdsgnr: I doubt that they would be staying in tahiti if they wanted to go to Samoa or tonga, one major difference is the price of everything, hotel, food tra
34 mariner: I've no idea how those two resorts are marketing themselves, what their target market is, I can only tell you what I know. My Australian business par
35 LAXintl: Boy I remember that. Polynesian left a trail of large debts here at LAX. I even recall their ex Air Canada 767 was impounded briefly. Also what a mes
36 Mortyman: This was sad to hear. I was just on Samoa and stayed at the Coconuts in September this year. The flights to and from Samoa was full and so was the hot
37 DavidByrne: Maybe the solution, probably much cheaper than subsidising the LAX-APW-TBU flight, is for the Island governments to subsidise a renewed "Coral Route"
38 RyanairGuru: You're a genius! Other than the loss of a little local pride and the prestige of not having a LAX flight who stands to lose? With NZ 320 APW-RAR, to
39 eta unknown: Three things: I have a different view of "sordid": I think it's sordid that NZ would tell its shareholders they are willingly to operate a subsidized
40 767er: Does anyone remember or flew with Royal Tongan? What a disaster that was.They flew to AKL and SYD. I recall they leased a 757 which was just way too b
41 alangirvan: I saw pix of the Royal Tongan 757, which they got from Royal Brunei, I think. One advantage of a 757 was that it could have done Tonga to Hawaii non
42 koruman: A few points herel 1) The smaller the airline operation, the higher the risk of cancellation / delay destroying the schedule (viz Polynesian, Royal To
43 mariner: For myself, I'd need a lot of persuading to go to Pago Pago, but the fact remains that no airline has been able to make a go of either APW-LAX or PPG
44 aerorobnz: 1) The Maintenance base for widebodies is here 2) It allows better utilization of resources (ie: within 1h10min it can be turned around and on it's w
45 koruman: Don't get me started on that....... Air New Zealand until two years ago flew a 763 configured 24 business seats / 210 economy on AKL-RAR-PPT-LAX. The
46 koruman: The obvious utilisation for a 77E would have been: AKL-LAX LAX-PPT PPT-LAX LAX-AKL That would have taken aerobnz's issues out of the equation, and th
47 mariner: Just for general reference here, in 2009: http://www.rnzi.com/pages/news.php?op=read&id=46309 "Tourism figures in French Polynesia have continued
48 aerorobnz: That would be the best solution I agree. Far better than ending in CHC and keeps the aircraft in use and LAX always has loads of crew up that way any
49 KiwiRob: As we all know koruman never let the facts stand in the way of a good NZ bashing I don't see why NZ should continue the KFC run to Samoa and Tronga i
50 NZ1: There is more to the story than what has been posted here. Unfortunately I am bound by confidentiality so cannot say any more; except to say, I would
51 eta unknown: Umm... everything Koruman reads or what we read from Koruman!?!
52 nzrich: Is interesting after having stayed in Coconuts and talking to the management the resort actually depends on NZ and Aussie guests . When we stayed the
53 koruman: What does that have to do with anything? I'm talking about Air New Zealand operating a 77E flight, not running a hotel! The fact that Air France dedi
54 aerorobnz: hahaha 90% empty is a nonsense to the point that it's laughable. You are suggesting just 3 business seats and 4 premium economy seats are sold for ea
55 mariner: I can't believe you're serious. The critical number is that tourism arrivals were down 25% and from an already depressed base. This is how tourism wa
56 RyanairGuru: The key difference is those flights aren't subsidised: they're run on a profit maximising basis. So either they are making money or NZ in utterly ine
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