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Tahiti Forms Urgent Committee On TN Future  
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Posted (2 years 9 months 2 weeks 1 day 11 hours ago) and read 3937 times:

Yesterday at meeting by the president of French Polynesia it was agreed government agencies including ministries of finance, tourism, employment and economy along with employee unions will convene an urgency committee that within 15-days shall come up with suggestions as to future business plans and “dimensions” of Air Tahiti Nui.

The company which currently employs some 750 and is forecast to produce unsustainable €1.8mil deficit each month. This follows recapitalization late last year where most shareholders were wiped out as the enterprise was essentially bankrupt.

Also was announced that only about 5% of the staff accepted voluntary redundancies – which is below needed to achieve previously announced cost reduction plans. Additionally the company has yet to reach agreement with unions on pay-freeze and elimination of what is social norm of receipt of 13th month pay.

Articles: (en francais)
http://www.lesnouvelles.pf/article/c...yndicats-sinvitent-a-la-presidence
http://www.lnc.nc/article/polynesie-...ncaise/plan-social-chez-air-tahiti


It seems to be no current talk of alliances or the reported partnership with Air France. First everyone must assure the existance of TN before they consider such alternatives.

[Edited 2012-02-16 15:05:39]

10 replies: All unread, jump to last
 
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 1, posted (2 years 9 months 2 weeks 16 hours ago) and read 3450 times:

The appointed joint committee composed of representatives of unions and management of Air Tahiti Nui did not met yesterday as planned. It is understood that based on comments of Air Tahiti Nui chairman that company has demand that salaries must be reduced by 10% immediately which was viewed by the unions as a precondition before even commencing talks.
Apparently they have rescheduled first meeting for the committee to this weekend.

Let see if these people can ever reach a joint consensus decision about future of ATN.


User currently offlineIndependence76 From United States of America, joined Jul 2007, 268 posts, RR: 0
Reply 2, posted (2 years 9 months 2 weeks 13 hours ago) and read 3307 times:

I really hope they create a new business model for small-island long-haul. I can imagine in the future a replacement of A343s with A333s or A358/A359s. Weight reduction and cutting half of the engines off for fuel and maintenance should be a wise move in the next 5 years.

The dilemma of this plan would be delivery slots. A330's would mean pilot training would be virtually minimal, while the A350 would contain some newer technology that would require more time in the simulator for. Considering a long-term reduction of costs is required, the A350 makes more sense due to their weight and fuel reductions from the A330.

An alliance is not priority. From looking at their current codeshare agreements, Oneworld seems like the best fit. SkyTeam already has AF operating CDG-LAX-PPT successfully.

As for the future of TN, no rebranding is required. The livery is beautiful and adored by many. Their cabins could definitely go for an update, but the costs of implementing newer aircraft and newer seats is simply "X" at the moment. We have to see if TN knows what they're doing first.



"In general, pride is at the bottom of all great mistakes." - John Ruskin
User currently offlinemigair54 From Spain, joined Jun 2007, 1856 posts, RR: 1
Reply 3, posted (2 years 9 months 2 weeks ago) and read 3033 times:

I think an agreement with AF to codeshare instead of going all the way to CDG... So Air Tahiti should operate PPT-LAX-PPT and AF only CDG-LAX-CDG... The cost of this rotation for planes, hotels, crew allowances must be huge and to recover that you need a huge profit in the route... and with the spare plane they can start thinking about new routes or just downsize a bit the fleet...

Quoting Independence76 (Reply 2):
I really hope they create a new business model for small-island long-haul. I can imagine in the future a replacement of A343s with A333s or A358/A359s. Weight reduction and cutting half of the engines off for fuel and maintenance should be a wise move in the next 5 years.

Very right... getting new A333 could also help a lot on fuel cost and Mx...


User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 4, posted (2 years 9 months 1 week 6 days 22 hours ago) and read 2959 times:

Air Tahiti Nui bought the A340 because ETOPS rules meant that twins had a big dogleg towards Hawaii en route between PPT and LAX.

It's hard to separate out what the airline requires, what the territory requires and what is prestige.

I would say that the priorities for the main shareholder - the government - need to be:

1) An insurance policy to ensure that on 4 key routes, service is guaranteed come what may (Japan, LAX, AKL and CDG), regardless of the whims of foreign carriers.

2) Scope to develop services to Australia, Chile and Brazil.

3) Services to the key markets of Japan, USA, New Zealand and France need to earn frequent flyer credit on major programs in those countries, to incentivise passengers to choose a Tahitian vacation over one in a competing island destination.

Any decision on the future of Air Tahiti Nui should then be deferred until the government has negotiated with Air New Zealand, JAL, Qantas and LAN to determine whether they would be willing for the government to underwrite services by them to PPT for an initial 10 year contract period. If they were to agree, it would be a better outcome for the government than owning a loss-making airline.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 5, posted (2 years 9 months 1 week 6 days 8 hours ago) and read 2704 times:

I think people are finally waking up the realization that creating ATN was a terrible mistake.

With over 10-years of losses, French Polynesia has been largely left at the mercy of continuing to support this enterprise as there hardly any other aviation companies flying to the islands.

Only 10-years ago there was a vibrant and competitive aviation market, now everyone from the local taxi driver, to store keeper to hotel owners has their future held hostage by the ability of this one company. Tourism is at almost a 13-year low – down over 30% from its peak, and entire industries such as cruise ship segment have left Tahiti.

Its absolutely true that now without the lack of competition there are folks in places as the big market America that do not wish to utilize TN as they do not earn any points or benefits. There are not many options in ticket prices. Again another downside of having a near monopoly.


It is a critical position where TN is today. Government has made it clear that is cannot continue to support these large annual losses, while at the same time it seems outside parties don’t want to invest in a loss making enterprise either. As result government seems to only have one option and that is to push savings from employees, however I am not sure this solves the underlying issue of a poor business plan, while also creating more social problems. It was mentioned in one paper, that even if TN had its 5 A340 aircraft for free, it would still generate operating loss.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 6, posted (2 years 9 months 1 week 16 hours ago) and read 2211 times:

In grave tone the President of French Polynesia joined one of the committee meetings this week.

He stated French Polynesia which now has 85% of the shares in ATN can no longer continue paying for the airline. Since its inception the carrier has failed to generate a profit, and the country has its investment capital diminsh by 88% as losses wipe out share holder equity.

Some ideas that came out of the meetings including reducing the scope of operations from 5 aircraft fleet flying about 25,000 hours annually to 4 aircraft with 17,000 hours with resultant personnel adjustments. Also proposal was made to create a 50/50 union-management team to manage run the airline. In the mean time company will continue to pursue its 10% planned staff cuts which were announced in November.

No final agreement was reached yet especially in area of social changes. Unions have demand that company go through audit to see its structure and spending clearly and develop a future strategy prior to making decisions on cuts as 10-years of doing the same things have not produced any positive results and becoming just smaller is unlikely to resolve any failures with corporate structure or existing business plan.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 7, posted (2 years 8 months 3 weeks 4 days 14 hours ago) and read 1776 times:

Well the 15-day period has come and gone without much of anything except for airline instituting a 20,000XPF (~€170) fuel surcharge on tickets.

The unions as precondition has demand that company financial books undergo a impartial audit. The accounting documents required have been received however a report wont be possible until at least April.

Company feels it needs to separate quickly from minimum 10% of its 780 employees, and reduce flight program from 25,000 to 17,000 annual hours.

Also interesting it came out, company remaining working capital down to €13.4mil after generating mounting €94.7mil losses over years.


User currently offlineanstar From United Kingdom, joined Nov 2003, 5304 posts, RR: 7
Reply 8, posted (2 years 8 months 3 weeks 4 days 14 hours ago) and read 1725 times:

Quoting mercure1 (Reply 7):
Company feels it needs to separate quickly from minimum 10% of its 780 employees, and reduce flight program from 25,000 to 17,000 annual hours.

hmm... seems like they need to cut more than 10% of jobs of they are thinking of dropping from 35k to 17k hours.


User currently offlinekiwiandrew From New Zealand, joined Jun 2005, 8603 posts, RR: 13
Reply 9, posted (2 years 8 months 3 weeks 4 days 13 hours ago) and read 1657 times:
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Quoting mercure1 (Reply 7):
:


Well the 15-day period has come and gone without much of anything

Let's be honest, the words 'urgent' and 'committee' do not usually work well together. The 15 day period will undoubtedly become 150 days and the situation at TN will continue to worsen while the committee members try to score points off each other.



Moderation in all things ... including moderation ;-)
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 10, posted (2 years 8 months 3 weeks 4 days 12 hours ago) and read 1567 times:

Well yes expecting change was unrealistic I suppose, however this is the first time in 10-years now that they government really seems nervous and worried about airline.

With all the other local social and economic problems faced in FP, it seems government understands it cannot continue the loss making enterprise and very much wants to see something different.

But big question is if simply personnel and salary cuts are enough (in my opinion no, staff are not the problem of business plan), or must adopt more drastic change like rumored partnership with Air France or Virgin Australia, or even worse fate. Now even always formerly profitable Air Tahiti is loss making and cutting some routes in archipelago so things are bad.


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