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Air Tahiti Nui Seeks ATI-JV With Air France, Delta  
User currently offlineLAXintl From United States of America, joined May 2000, 26022 posts, RR: 50
Posted (1 year 7 months 2 weeks 6 hours ago) and read 11649 times:

Air Tahiti Nui has filed with the DOT for authority enter into ATI JV with Air France providing for metal neutrality and revenue sharing on its trunk trans-Atlantic route between Tahiti, Los Angeles and Paris. (the local LAX-PPT segment is not covered in the proposal)

Along with the proposed AF-TN JV, Air Tahiti also seeks to link with other Air France immunized alliance partners Alitalia, Delta, and KLM, TN's current single trans-Atlantic route enabling carriers to increase service options, and enhance competitiveness for unaligned TN.

Carriers say their long-term relationship along with the political, cultural and commercial links between Tahiti and France provide for common business interest leading to this proposed Atlantic JV and is essential for the continued viability of TN as a international airline.

Also for those thinking - the application says TN has no plans to join Skyteam - the cost and burdens in joining would outweigh the benefits they say. They also say they will maintain their trans-Pacific codeshare relationship with American Airlines. (and I assume others with QF and JL as well)



OST-2013-TBA

[Edited 2013-04-15 17:05:48]


From the desert to the sea, to all of Southern California
43 replies: All unread, showing first 25:
 
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 1, posted (1 year 7 months 2 weeks 4 hours ago) and read 11251 times:

I wonder when this relationship will evolve into the one like former UTA-Air France.

They both meet and park side by side at LAX.
TN only operates PPT-LAX and AF takes passenger between LAX-CDG.

I think AF and JV partners will find they prefer to keep passengers on own aircraft with better economics then have TN also service Paris directly one day.

Could be eventual win-win.
Allow TN to exit costly operation all the way to Europe, and allow AF to bid adieu to French Polynesia and its complaints about route and staff cost. They also can better schedule LAX service with 2 daily turnarounds instead then.


User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 2, posted (1 year 7 months 1 week 6 days 21 hours ago) and read 10751 times:

There is a lot of nonsense written and spoken about the supposed poor economics of two-sector flights and of the imaginary virtues of codesharing so that one partner flies the first sector and the second flies the second.

I had this discussion with a senior Singapore Airlines executive, who told me that in fact the conventional wisdom is nonsense, and that they find the two-sector model to the USA far more profitable than single-sectors. In addition, they find that codeshares in general when withdrawing from a route are a form of damage minimisation but that they make it impossible to make a profit thereafter on that route.


User currently offlinePHX787 From Japan, joined Mar 2012, 7851 posts, RR: 19
Reply 3, posted (1 year 7 months 1 week 6 days 20 hours ago) and read 10611 times:

So my thread about a drunk FX pilot's rumor about DL wanting something with TN isn't necessarily all scotch afterall  
(of course this is a reverse case, JV case...)
Well this will be interesting to see. What can DL bring to the table here? Further connections beyond LAX? Would that help TN's financial position?



我思うゆえに我あり。(Jap. 'I think, therefore I am.')
User currently offlineLAXintl From United States of America, joined May 2000, 26022 posts, RR: 50
Reply 4, posted (1 year 7 months 1 week 6 days 15 hours ago) and read 9322 times:

Delta's part in this is allowing TN to join the Atlantic JV, not LAX connections. (TN does that with AA to 19 US markets via LAX already). So for DL on paper there is another US-France flight it can sell.

From reading the application this is all about helping manage the loss making LAX-CDG sector for TN and help unlock the AF network and customer base (they mention frequent flyers) at CDG and improve TN's traffic flow and market competitiveness in Europe.



From the desert to the sea, to all of Southern California
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 5, posted (1 year 7 months 1 week 6 days 15 hours ago) and read 9154 times:

The CEO of TN Etienne Howan tell media the Paris segment was very deficient for the carrier. The 22-hour journey produce loss.

With agreement with AF, he say TN can focus to fortify performance of Los Angeles sector, and AF and its partners help manage sales and cost the LAX-CDG sector.

Also says the AF venture will give opening to TN being able to sell itself from other European markets like Italy, Switzerland, Germany under single TN flight code and help boost tourism prospects.

But this not solve the many problems of TN. They currently remain in tense negotiation with trade unions for continued cost reductions.


User currently offlineairproxx From France, joined Jun 2008, 640 posts, RR: 1
Reply 6, posted (1 year 7 months 1 week 6 days 13 hours ago) and read 8677 times:

I do not know the terms of the current contract between AF and TN, but reading the many threads on this subject, I can not help but wonder why France continues to strive to finance an airline like TN, which has never generated any profit ... For tourism?
I would like to know the balance between the expense generated by TN, and profits generated by tourism, because in my opinion, this is the real question.



If you can meet with triumph and disaster, and treat those two impostors just the same
User currently offlinedeltalaw From United States of America, joined Oct 2012, 78 posts, RR: 0
Reply 7, posted (1 year 7 months 1 week 6 days 12 hours ago) and read 8377 times:

Begs the question...if they can't make money, was does TN continue to operate LAX-CDG? What benefit to AF does TN provide to motivate them to continue to prop up TN?

User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 8, posted (1 year 7 months 1 week 6 days 12 hours ago) and read 8356 times:

Well several comments come to mind.

In general we know France provides and manage annual budgets to its foreign territories, this clearly includes subsidy to help industry, or even things like to provide price controls on product.
TN is a tiny tiny little part of this bigger politic issue. Since its politics I will avoid to discuss here.

For the aviation and tourism view point is as follows.

Until formation of TN, French Polynesia was 100% dependent on outside companies to bring passenger and goods to islands. In my view this was OK, but to many this was bad situation as one become dependent on outside business interest that do not view or place importance on Tahiti market. Some complain fares were high, there were poor schedules, or not enough seats.

So local politicos lobby and gather money to found airline. This was not unusual and different then other French overseas territories that had own airlines (New Caledonia, Reunion, etc).

TN start service in 1998, and no surprise its a very expensive and competitive situation develop.

In order to assist TN, one way or the other, other competition companies were pushed out from Tahiti. Some like Qantas enter codeshare with TN, others like Corsair were pushed harder by government to depart.

Eventually this situation evolve to where TN now become majority of capacity to islands. But instead of making good money and advantage of its situation and everyone happy, we have events of like 9-11, the American wars, world economy mess, and airline continue to lose money as tourism decline.

Today the situation has become that FP, its citizens, and hotels are dependent on the fortune of TN. Good or bad, market is dependent of TN, and without TN it would be real economic disaster for islands. Tourism is still down (this is largest sector about 1/4 of GDP), and local economy is so so. Also cannot accept mass losses of jobs - TN employ almost 1,000 people, and tourism industry cannot absorb more loss either.

But it seems the local government has woken up last year maybe to realize it no longer can afford to write new check to cover losses of TN, but has hard time to define how to improve things. They try to cut cost, increase revenue but it seems this is not enough either yet. Now some depending on TN like hotel industry and local citizens complain even more as fares rise and traffic decline further. Some now say maybe the entire business plan idea might be rotten.

Its almost a stand off now. While I think many realize TN is problem for islands, there is no ready solution to replace capacity which FP is to critically dependent on.

I think this deal with Air France is simply one step of many needed and meant to help manage the losses on the long Paris sector. AF is much more expert at selling tickets from LAX to Paris then TN can. It must often discount heavy. Access to AF frequent flier customer and lots of new connections via CDG can only help TN.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 9, posted (1 year 7 months 1 week 6 days 11 hours ago) and read 8289 times:

Quoting koruman (Reply 2):
There is a lot of nonsense written and spoken about the supposed poor economics of two-sector flights and of the imaginary virtues of codesharing so that one partner flies the first sector and the second flies the second.

I had this discussion with a senior Singapore Airlines executive, who told me that in fact the conventional wisdom is nonsense, and that they find the two-sector model to the USA far more profitable than single-sectors. In addition, they find that codeshares in general when withdrawing from a route are a form of damage minimisation but that they make it impossible to make a profit thereafter on that route.

Maybe works for Singapore Airlines, but it seems this is the opposite directional trend in the industry.

The recent mega Qantas - Emirates deal is built around concept transferring customers to partner at middle point. Jointly they can cover many more markets and handle customers than QF can on its own.

So I dont think its surprise TN-AF reach JV agreement via LAX.

Does not seem to be nonsense for much of industry.

Quoting deltalaw (Reply 7):
Begs the question...if they can't make money, was does TN continue to operate LAX-CDG? What benefit to AF does TN provide to motivate them to continue to prop up TN?

AF-TN have had commercial links since the beginning. Also there are strong political, cultural that likely effect the situation.

Plus dont forget AF itself also had a problem in its Tahiti route with its crew base so this could be part of AF helping itself by providing additional flight frequencies to help build revenue in market.

So whatever the reason, it seem AF was happy to enter into such a JV.


User currently offlineAzure From France, joined Dec 2012, 629 posts, RR: 16
Reply 10, posted (1 year 7 months 1 week 6 days 11 hours ago) and read 8196 times:

Quoting airproxx (Reply 6):
why France continues to strive to finance an airline like TN

Really ? Can you please explain ? TN was founded by the local government of French Polynesia, right ? I have never heard of the French government subsidizing TN...



Quoting mercure1 (Reply 1):
I wonder when this relationship will evolve into the one like former UTA-Air France.

They both meet and park side by side at LAX.
TN only operates PPT-LAX and AF takes passenger between LAX-CDG.

It is a possibility. This would be similar with what AF and SB are already doing for the NRT - NOU or KIX - NOU services.

I wonder though if this dual carriers service is the best way to serve these distant islands. UTA used to fly around the world and they were successful. I am aware it was a totally different time with much lower fuel price but still, I wonder if AF should not take over SB and TN, period (I know politics are involved here). What is the point for these local carriers anyway ? Their local governments keep on subsidizing them but the price from mainland France is still absurdly high : eg: CDG - PPT via LAX is often at € 2,200 in Y while CDG - LAX alone - the longest sector - is € 800... Any thoughts ?



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlineLAXintl From United States of America, joined May 2000, 26022 posts, RR: 50
Reply 11, posted (1 year 7 months 1 week 6 days 9 hours ago) and read 7774 times:

Quoting koruman (Reply 2):
There is a lot of nonsense written and spoken about the supposed poor economics of two-sector flights and of the imaginary virtues of codesharing so that one partner flies the first sector and the second flies the second.

Call it nonsense if you wish, but appears more and more in the industry seek to establish such models.

Clearly lots of bright people must look at the numbers and feel its an appealing enough proposition to follow.

If anything it allows carrier to work to their own strengths and use utilize partners to cover weaker spots and fill in network holes.

Quoting mercure1 (Reply 8):
Its almost a stand off now. While I think many realize TN is problem for islands, there is no ready solution to replace capacity which FP is to critically dependent on.

Things seems to have become a catch-22.

FP likes control of its capacity, but now its held hostage by fate of TN, and encouraging new competition which might take some time to accomplish might kill TN completely and make islands again reliant on outside capacity the thing that led to formation of TN to begin with !

Quoting mercure1 (Reply 9):
Plus dont forget AF itself also had a problem in its Tahiti route with its crew base so this could be part of AF helping itself by providing additional flight frequencies to help build revenue in market.

Will be interesting to see how this develops in long run.

Will AF eventually exit LAX-PPT and TN leave LAX-CDG ?



From the desert to the sea, to all of Southern California
User currently offlineScottB From United States of America, joined Jul 2000, 6808 posts, RR: 32
Reply 12, posted (1 year 7 months 1 week 6 days 9 hours ago) and read 7721 times:

Quoting koruman (Reply 2):
I had this discussion with a senior Singapore Airlines executive, who told me that in fact the conventional wisdom is nonsense, and that they find the two-sector model to the USA far more profitable than single-sectors.

That's an apples-to-oranges comparison. The single sectors from SIN to the USA don't work due to the long distances and the inability of the premium traffic demand to cover the very high costs of operating an A345 from SIN to the USA. If you were trying to draw a valid comparison with TN, it would be between a hypothetical PPT-CDG non-stop and the current PPT-LAX-CDG.

As others have said, the real issue is:

Quoting mercure1 (Reply 5):
The CEO of TN Etienne Howan tell media the Paris segment was very deficient for the carrier.

TN lacks the market presence and frequent flyer loyalty in LAX & CDG to effectively compete on the LAX-CDG route, and a fair number of the LAX-PPT seats will be taken by U.S.-originating customers. So operating a half-empty LAX-CDG sector will be very, very costly.

Quoting koruman (Reply 2):
In addition, they find that codeshares in general when withdrawing from a route are a form of damage minimisation but that they make it impossible to make a profit thereafter on that route.

TN loses a boatload of money between LAX & CDG so yes, they do need to minimize the damage. In any event, the requirements to clear U.S. immigration at LAX don't really offer a significant advantage to a single-aircraft operation apart from possible disruptions during irregular operations.

Quoting LAXintl (Thread starter):
Air Tahiti Nui Seeks ATI-JV With Air France, Delta

Are you certain that the JV will include DL? It doesn't seem that way from your initial paragraph.


User currently offlineLAXintl From United States of America, joined May 2000, 26022 posts, RR: 50
Reply 13, posted (1 year 7 months 1 week 6 days 9 hours ago) and read 7662 times:

Quoting ScottB (Reply 12):
Are you certain that the JV will include DL? It doesn't seem that way from your initial paragraph.

Yes, Delta is included.

The JV is with Air France, which will inturn includes its ATI JV partners DL-AZ-KL in the agreement as they all pool their Atlantic flights.

The first few lines of the application contain:

Air Tahiti Nui and Air France, with Delta, KLM and Alitalia hereby apply for approval of and antitrust immunity for alliance agreement


What is excluded from this is the local LAX-PPT segment. TN says it will maintain it agreement with AA for the trans-Pacific segments and codeshare to 19 domestic cities on AA via LAX.



From the desert to the sea, to all of Southern California
User currently offlineAesma From France, joined Nov 2009, 6843 posts, RR: 12
Reply 14, posted (1 year 7 months 1 week 6 days 8 hours ago) and read 7517 times:

First, to be clear, French Polynesia is France, so a flight to Paris is not a flight to France it's a flight to metropolitan France.

Then, every link between French overseas territories (whatever their exact legal situation) and metropolitan France is subsidized. If TN stops flying to Paris, I can't see how the subsidies can continue.

As for subsidizing the territory in general, well, the French state doesn't get any tax money from there, that says it all. Meanwhile there are public servants, professors etc. (and if they come from metropolitan France, they get a crazy salary and pension), all paid for by the French government. That lets local politicians tax the hell out of people nonetheless, making projects like TN possible.

I love TN livery and choice of aircraft, but things have to change in all the French overseas territories, where corruption and nepotism are rampant, and if that means the death of that airline, so be it.

Just to be clear, I'm not against subsidies and I doubt French overseas territories will ever bring money in the French coffers, but for such cost I would like people there to actually have jobs and a good living standard and democracy, aside from the scenery and weather that is. Unfortunately they even elect people right out of jail !



New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
User currently offlinemotorhussy From New Zealand, joined Mar 2000, 3284 posts, RR: 9
Reply 15, posted (1 year 7 months 1 week 6 days 6 hours ago) and read 7119 times:

Quoting koruman (Reply 2):
and that they find the two-sector model to the USA far more profitable than single-sectors

That is because a single sector flight from SIN to anywhere US mainland is an ultra-long-haul route that can only be flown (currently) by the A345 or 77L. The economics of flights like this are skewed by the need to carry more fuel to travel the distance and even to lift the fuel and load off the ground. There is also the aspect of needing to carry extra flight and cabin crew on board to cover the downtime and rotation necessitated by such a long time in the air. Plus SQ has the ability to pick up passengers en route to the US via Japan, Taiwan, Moscow etc that TN doesn't get to CDG via LAX.

Good luck to TN on an ATI joint venture with DL & AF, I hope it works well for them and for the people of Polynésie Française.

Regards
MH



come visit the south pacific
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 16, posted (1 year 7 months 1 week 6 days 5 hours ago) and read 7050 times:

Yes metropolitan France does subsidize TN and the other territory airlines as well.

For example in middle 2012 airline said its assistance from France has been reduced by EUR2.5mil under Sarkozy budget. I am not sure what this directly cover. However its interesting Hollande campaigned by saying he would reestablish the lost funding previous cuts to overseas territories.
As mentioned above this includes everything from payment of salaries of teachers, to social things like hospitals, to infrastructure projects to whatever amount the airlines get. As example the ATR operator Air Tahiti get very direct funding as routes are considered public service obligation.
Also there was assistance in TN aircraft purchase. A340s are backed by French central bank and even approved by French Senate at time. Also no taxes were paid on purchase which help reduce the cost further.


User currently offlineairproxx From France, joined Jun 2008, 640 posts, RR: 1
Reply 17, posted (1 year 7 months 1 week 6 days 5 hours ago) and read 7050 times:

Quoting Azure (Reply 10):

Really ? Can you please explain ? TN was founded by the local government of French Polynesia, right ? I have never heard of the French government subsidizing TN...

Mmmm maybe simply because French Polynesia "government" is actually a part of France   ;

Check this

http://en.wikipedia.org/wiki/Tahiti

with this particular quote : "Tahiti is the largest island in the Windward group of French Polynesia (an overseas country of the French Republic), located in the archipelago of the Society Islands in the southern Pacific Ocean."

Quoting Aesma (Reply 14):
First, to be clear, French Polynesia is France, so a flight to Paris is not a flight to France it's a flight to metropolitan France.

Then, every link between French overseas territories (whatever their exact legal situation) and metropolitan France is subsidized. If TN stops flying to Paris, I can't see how the subsidies can continue.

Thanks Aesma.



If you can meet with triumph and disaster, and treat those two impostors just the same
User currently offlineairproxx From France, joined Jun 2008, 640 posts, RR: 1
Reply 18, posted (1 year 7 months 1 week 6 days 5 hours ago) and read 7040 times:

Quoting Aesma (Reply 14):
As for subsidizing the territory in general, well, the French state doesn't get any tax money from there, that says it all. Meanwhile there are public servants, professors etc. (and if they come from metropolitan France, they get a crazy salary and pension), all paid for by the French government. That lets local politicians tax the hell out of people nonetheless, making projects like TN possible.

I love TN livery and choice of aircraft, but things have to change in all the French overseas territories, where corruption and nepotism are rampant, and if that means the death of that airline, so be it.

Couldn't have it summed up any better.
It's been too long since TN kept bleeding money from every part. And I don't see why AF wouldn't take over the whole lines between Europe/US and Tahiti.



If you can meet with triumph and disaster, and treat those two impostors just the same
User currently offlineairproxx From France, joined Jun 2008, 640 posts, RR: 1
Reply 19, posted (1 year 7 months 1 week 6 days 5 hours ago) and read 7031 times:

Quoting LAXintl (Reply 13):
The first few lines of the application contain:

Air Tahiti Nui and Air France, with Delta, KLM and Alitalia hereby apply for approval of and antitrust immunity for alliance agreement


What is excluded from this is the local LAX-PPT segment. TN says it will maintain it agreement with AA for the trans-Pacific segments and codeshare to 19 domestic cities on AA via LAX.

Looks like TN is purely requesting the cake and butter here...



If you can meet with triumph and disaster, and treat those two impostors just the same
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 20, posted (1 year 7 months 1 week 6 days 5 hours ago) and read 7000 times:

For question about Delta above --

Here is quote from TN CEO (translated);

In case of approval, the agreement would enable Air Tahiti Nui to cooperate and coordinate flights between Paris-Charles de Gaulle and Papeete Faa'a over United States.
"Pooling flight schedules with Air France and its alliance comrades will provide our Air Tahiti Nui customers more options on cross Atlantic flights, will give our customers access to the Air France network in Europe and will also increase Air Tahiti Nui offering flights between Tahiti and Paris via Los Angeles" said Etienne Howan, CEO of Air Tahiti Nui.


I guess DL is that "comrade"

[Edited 2013-04-16 18:17:59]

User currently offlinecuriousflyer From United States of America, joined Oct 2006, 700 posts, RR: 0
Reply 21, posted (1 year 7 months 1 week 6 days 4 hours ago) and read 6942 times:

Quoting Aesma (Reply 14):
First, to be clear, French Polynesia is France, so a flight to Paris is not a flight to France it's a flight to metropolitan France.

Then, every link between French overseas territories (whatever their exact legal situation) and metropolitan France is subsidized. If TN stops flying to Paris, I can't see how the subsidies can continue.

As for subsidizing the territory in general, well, the French state doesn't get any tax money from there, that says it all. Meanwhile there are public servants, professors etc. (and if they come from metropolitan France, they get a crazy salary and pension), all paid for by the French government. That lets local politicians tax the hell out of people nonetheless, making projects like TN possible.

I love TN livery and choice of aircraft, but things have to change in all the French overseas territories, where corruption and nepotism are rampant, and if that means the death of that airline, so be it.

Just to be clear, I'm not against subsidies and I doubt French overseas territories will ever bring money in the French coffers, but for such cost I would like people there to actually have jobs and a good living standard and democracy, aside from the scenery and weather that is. Unfortunately they even elect people right out of jail !

Agree 100%

Good luck to TN and AF on that one but I hope they are sensible and limit the cost for the French Government.


User currently offlineAzure From France, joined Dec 2012, 629 posts, RR: 16
Reply 22, posted (1 year 7 months 1 week 5 days 13 hours ago) and read 6634 times:

I am well aware that French Polynesia is part of France, thank you ! I am also well aware that TN is subsidized by the local polynesian government.
What I am questioning here is :
1. that the national French government is subsidizing TN directly. Could anyone provide some information on this point ?
2. the interest to subsidize a local airline when it failed to achieve its tasks, ie lowering the ticket price to mainland France and developing/promoting tourism in French Polynesia.



I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 23, posted (1 year 7 months 1 week 4 days 14 hours ago) and read 6350 times:

Its a question of degrees.

Paris does not write a check directly to TN, but it yes provides subsidy in various forms to overseas territory airlines.

For example some routes are designated public service obligation. Both domestic routes and international routes can be designated as they are critical links. This subsidy provide to guarantee airline revenue. (this happen in metropolitan France also - service to places like Corsica is with subsidy).

Then there is benefit of avoidance of taxes for overseas companies. They have tax credit and avoid various taxation being based overseas

There is government loan guarantees for overseas companies. Either very low rates, or sometimes government forgiveness of portion commercial loans for benefit of overseas departments. It part of development aid to encourage activity in overseas territories.

Then there is direct payment to overseas departments to assist with infrastructure and transportation. So yes French Polynesia then use this money to fix runways and also to assist local companies.

I suppose which ever way to see it, the French citizen yes is providing subsidy to the many companies based overseas including yes the airlines.


User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 24, posted (1 year 7 months 1 week 4 days ago) and read 6105 times:

This development seriously worries me, not in terms of the economic health of TN/AF, but in terms of more hotel closures.

The SB/AF joint venture has been a disaster for New Caledonian tourism. The two airlines survive due to absurdly inflated fare levels, and as a result their inefficient practices (e.g. flight crews for SB) have been perpetuated and worsened. But a prospective French visitor sees that he or she can fly Economy class to the Seychelles or Mauritius for $1200 or to Noumea for $3900 and turns away.

The exit of Qantas, Continental, competing French carriers and Air New Zealand has been a complete disaster for French Polynesian tourism. Air Tahiti Nui has had an Asia-Pacific monopoly and only Air France competing to the USA and Europe. Fare levels are already absurd compared with Hawaii.

And whereas Hawaiian tourist levels are at historic highs, with even long-abandoned hotels like the Sheraton Keauhou reactivated, multiple French Polynesian properties are already abandoned and derelict, off the top of my head:

Tahiti: Hyatt, Sheraton, Sofitel, Holiday Inn, Te Puna Bel Air, Te Anuanua
Moorea: Club Med, former Beach Club
Bora Bora: Hotel Bora Bora, Club Med, Orient-Express, former Beach Club.

The move to start a joint venture between Air Tahiti Nui and Air France is absurdly anti-competitive, as it will ensure that every single flight into French Polynesia is a monopoly.

And we will watch Hawaiian tourism continue from strength to strength while Tahitian inbound tourism falls ever lower.


User currently offlineProst From United States of America, joined Oct 2012, 1118 posts, RR: 1
Reply 25, posted (1 year 7 months 1 week 3 days 23 hours ago) and read 6191 times:

Is there any movement to attract more tourists from North America/East Asia to Tahiti? My understanding (which I fully admit may be completely wrong) is that the hotel/resorts there are all very high end, so may not be too appealing for middle class tourists. Well, they'd be attractive to us, we just couldn't afford them.

The reason I ask about the marketing aspect is I can't recall seeing anything marketed in the US.


User currently offlinemariner From New Zealand, joined Nov 2001, 25561 posts, RR: 86
Reply 26, posted (1 year 7 months 1 week 3 days 23 hours ago) and read 6196 times:
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Quoting Prost (Reply 25):
Is there any movement to attract more tourists from North America/East Asia to Tahiti?

Australia, certainly,and very successfully, with Aussie tourist numbers returning to pre-GFC levels - at last:

http://www.etravelblackboard.com/art...s-lead-a-tourism-revival-in-tahiti

"Australians flocked to Tahiti and her islands last year in a tourism comeback that saw Tahiti listed as one of the fastest growing overseas destinations and visitor numbers return to pre-Global Financial Crisis (GFC) levels."

And, increasingly, China:

http://www.lesnouvelles.pf/actu/la-p...sur-le-marche-de-lempire-du-milieu

"La Polynésie se positionne sur le marché de l'Empire du milieu"

The article is about how French Polynesia (Tahiti) is positioning itself in the "market of the Middle Kingdom."

mariner



aeternum nauta
User currently offlineAzure From France, joined Dec 2012, 629 posts, RR: 16
Reply 27, posted (1 year 7 months 1 week 3 days 13 hours ago) and read 6151 times:

Quoting mercure1 (Reply 23):

Thank you for your answer. The analogy with Corsica is interesting and I understand the French govt policy in terms of "continuation territoriale" ie the idea to subsidise certain air/sea routes in order to maintain connections between or within overseas territories and the "métropole". I do see the point for either the local or national government (or both) to subsidise Air Tahiti (ie VT) but I still do not see the point - at this stage of the debate at least - to subsidize Air Tahiti Nui (ie TN) : what is this airline doing that Air France , Corsair or another carrier cannot do ? In other words, does French Polynesia really need TN ?
In the past, Air France and/or UTA used to fly from Papeete not only to CDG via LAX or SFO, but also to Lima, Tokyo and Auckland, and with one or more stops to Jakarta or Singapore or Sydney. I am under the impression that French Polynesia was less isolated than now. 15 or 20 years ago it was easier to reach Tahiti from anywhere in the world than it is now...
It is also interesting to learn that TN can benefit from the export credit scheme or from something very similar, while AF and US airlines normally cannot (whether they buy Airbus or Boeing)...
I am thinking, well, dreaming, that AF should create a subsidiary company based in PPT, name it Air France Pacifique, take over TN and SB, and fly the former routes it used to fly ! What French Polynesia and New Caledonia are missing now (to boost tourism) are efficient and affordable connections to parts of this world where there is growth, ie South America and Asia.
I can even add that PPT is well located to capture a certain market share for transpacific ops : I have done some research on the Great Circle Mapper and I've come to the conclusion that PPT could be used as a hub by a well managed, ambitious airline.

Example #1 : Santiago Chile - Hong Kong


SCL - HKG
Via PPT = 10,435 NM
Via LAX = 11,148
Via LHR = 11,489


Example #2 : Sao Paulo - Tokyo


GRU - NRT
Via LAX = 10,086 NM
Via PPT = 10,778
Via DXB = 10,913


Example #3 : Lima - Singapore


LIM - SIN
Via PPT / NOU = 10,611 NM
Via SCL / SYD = 10,855
Via LAX / NRT = 11,247
Via CDG = 11,338


Conclusion :
French Polynesia has a number of advantages to capture a significant share of the traffic between the two fastest growing regions of the world : South America and North / South East Asia:
- Its geographical location
- The natural beauty of its islands
- Its priviledged fiscal environment

But I am afraid that building such an airline network requires exactly what TN is missing : good management and ambition...



Quoting koruman (Reply 24):
The SB/AF joint venture has been a disaster for New Caledonian tourism. The two airlines survive due to absurdly inflated fare levels, and as a result their inefficient practices (e.g. flight crews for SB) have been perpetuated and worsened. But a prospective French visitor sees that he or she can fly Economy class to the Seychelles or Mauritius for $1200 or to Noumea for $3900 and turns away.

I have to disagree with you here : AF is not exactly a "surviving" airline, it is not subsidised nor state-owned... As for New Caledonia, this island does not rely on tourism for its economy. The local government is not encouraging it, but the island is quite prosperous.
As for the fares from France, in peak season (around Christmas), the highest in Economy was around € 2,400 € IIRC, ie US$ 3,000. Most of the time though, it is priced around € 1,600 - US$ 2,000, close to those from France to Australia.



Quoting mariner (Reply 26):

Yeah. Australian tourism : +40% in 3 years. But where are we starting from ?...
As for China, well, what can I say ?... I looked for a ticket PVG - PPT on Expedia for the month of July in Y. The cheapest, via NRT, was offered at € 5,000 (US$ 6,200 approx)... Surely a chinese tourist can get a better price with a tour operator, but still, I have doubts on Tahiti's attractiveness with that kind of price....

[Edited 2013-04-19 09:49:24]


I fly because it releases my mind from the tyranny of petty things - A. de Saint Exupery
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 28, posted (1 year 7 months 1 week 3 days 13 hours ago) and read 6140 times:

Quoting Prost (Reply 25):
Is there any movement to attract more tourists from North America/East Asia to Tahiti? My understanding (which I fully admit may be completely wrong) is that the hotel/resorts there are all very high end, so may not be too appealing for middle class tourists. Well, they'd be attractive to us, we just couldn't afford them.

The reason I ask about the marketing aspect is I can't recall seeing anything marketed in the US.

Tourism is improving - but still far off historic highs. Here is chart -




But that is not bad as FP does not want to be, nor has capacity to be mass tourism market. Rather keep small, and high revenue.

In 2012 the top nationality in arrivals in French Polynesia were -

USA - 52,858 +4.2%
France - 35,898 +1.2%
Japan - 12,989 +7.7%
Australia - 10,224 +6.1%
Italy - 9,409 +5.6%
New Zealand - 7,166 +4.2%
Canada - 7,034 +4.2%


For US market specific, Tahiti Tourism has marketing push, especially in California and big feed markets like New York.
But remember however they are not trying to sell to mass audience, FP in not a Hawaii, but a tiny niche client market. So folks like more wealthy customers, upscale honeymoon, and top level travel agents is focus. But from market like France, FP is more a regular destination as people have long holidays and can come stay by renting a house or pension with family for 1-month at a time. More budget travelers from Europe, while US and Japan more luxury client.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 29, posted (1 year 7 months 1 week 3 days 13 hours ago) and read 6072 times:

Quoting koruman (Reply 24):
The SB/AF joint venture has been a disaster for New Caledonian tourism.

Like others mention prior, tourism not focus of New Caledonia, as they have other economic advantages unlike many Pacific islands. Is this a mistake, maybe, but historically NC has always disfavor big tourism.

In reality while there is still great economic imbalance in population its per capita GDP is much higher than other Pacific neighbors - for example 3x that of Fiji or, higher than many other large countries like Mexico, Brazil, Turkey, Egypt, South Africa, Indonesia etc..

What tourism there is, is mostly derived from Japan, France and Australia.

Quoting Azure (Reply 27):
In other words, does French Polynesia really need TN ?

You can say the same about other territories. How about Air Calédonie, Air Caraibes, Air Austral, etc.

You can also make argument also regarding former French colonies, Gabon, Cameroon, Madagascar, etc, but policy in France was to assist development and encourage creation of local airline enterprises - very often with UTA or Air France directly behind them.

So this concept remains today. Even if enterprise is not economic itself it seems this is viewed as social benefit.

Quoting Azure (Reply 27):
I am thinking, well, dreaming, that AF should create a subsidiary company based in PPT, name it Air France Pacifique, take over TN and SB, and fly the former routes it used to fly ! What French Polynesia and New Caledonia are missing now (to boost tourism) are efficient and affordable connections to parts of this world where there is growth, ie South America and Asia.

Ha ha yes good dream and map, but I am afraid AF has enough problems with things like cost/labor/unions to make this not very feasible. Remember AF almost close PPT itself last year due to issues with cost of crew base.

AF has slowly gotten out of such markets, in favor of local carriers like SB, so I think its way to late to re engage back into such ventures.


User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 30, posted (1 year 7 months 1 week 3 days 2 hours ago) and read 5907 times:

Mercure 1, I have two points to make in reply.

New Caledonia might be blessed with nickel, but living standards would be significantly higher, especially for non-whites, if the tourism industry had developed as hoped.

The two Le Meridien hotels have been around 10 or 15 years, but they have seen two Club Meds and the Novotel Le Surf fail in that time, as well as the Parkroyal.

The problem is basically Air Calin. The old Air Caledonie International operated Caravelles in the southwest Pacific but let UTA and other international airlines maintain a competitive landscape. But Air Calin is only viable when it flies to Korea or Japan and pushes passengers onto Air France, but this pushes fare levels far too high.

Similarly, Virgin Australia wanted to fly to Noumea and could have delivered tens of thousands of extra Aussie tourists, but found the costs were absurd.

Secondly, back to French Polynesia. The TN model strikes me as working incredibly poorly to bring high-end tourists to Bora Bora.

We are not talking about American CEOs flying in on their private jets. We are talking about the people who stay in $1000 per night overwater bungalows.

My guess is that in normal circumstances they would be split fairly evenly between lie-flat Business Class, Premium Economy or fully-inclusive Economy class.

But Americans in that demographic are in most cases going to be affiliated to a frequent flyer program, and in view of their very limited paid vacation leave this trip is likely to be the big mileage earner for the year.

That means that the $8000 return Business Class return (or $5000 Premium Economy) for a couple to get to their $1000 flights to BOB and their 5 nights at $5000 in an overwater bungalow is expected to earn them significant status and miles.

Now we all know that Bora Bora appeals mainly to passengers in North America living west of the Rockies. And LAX, SFO, PHX and YVR are all home markets for Star Alliance carriers.

So for French Polynesian tourism to be manacled to North American carriers other than Air Canada, United and US Airways is in my mind insane.

If I was a doctor in the Inland Empire outside Los Angeles I would consider Bora Bora for a vacation. But as soon as I realised that there would be no mileage or status reward in United's frequent flyer program I would either downgrade from Business to Economy class, or just fly United to Maui and vacation at the Four Seasons on Lanai or Maui or the Ritz-Carlton on Maui instead.

This is the right model for Air Tahiti Nui to improve its finances, but it's the worst possible model for French Polynesian tourism.

I think that the solution should be completely different.

French Polynesia, New Caledonia, Fiji and New Zealand all need Japanese and Chinese visitors, but inbound services struggle in all four countries.

I think that they need to pool their aviation resources with widebody services to a hub, probably Noumea, followed by narrow-body or A330 onward connections to Auckland, Queenstown, Rotorua, Christchurch, Nadi, Rarotonga, Papeete and Bora Bora.



And by all means let Air Tahiti Nui get into bed with Delta and Air France, but conditional upon either another carrier from the Star Alliance commencing services to French Polynesia.

I have another suggestion for that too. I'd like to see Air New Zealand use an A320 to fly AKL-RAR-BOB and offer connecting service from LAX to BOB via Rarotonga.

I discussed this several years ago with one of Gaston Tong Sang's senior staff a few years ago, and he was certain that BOB's runway could easily be upgraded to allow a narrowbody jet to fly the 600 miles to and from Rarotonga.

Motu Mute airport, Bora Bora


The obstacle was the potential damage to both Air Tahiti's domestic services, Air Tahiti Nui's services from LAX and the three big hotels on Tahiti. But only one of them remains now anyway.

Ultimately, the question has to be whether it is more important to reopen the Hotel Bora Bora, Bora Bora Lagoon Resort, Sofitel Tahiti, Hyatt Tahiti, Sheraton Tahiti et al or to make Air Tahiti Nui require less subsidies.

I personally think that the ability to offer all jet services into BOB via RAR would be a big gamechanger.



If you work on the principle that French Polynesia would like its 100,000 annual lost tourists back, but not significantly more, then the idea of TN "owning" PPT but NZ competing into BOB but via RAR can be quite appealing.

They would probably only run 3 weekly 171 seater A320 aircraft into BOB, but that would restore 25,000 of the lost annual tourists, and in the unlikely event that they could do it daily it would still only 60,000 passengers per year.

Which goes an awfully long way to reducing the 100,000 shortfall, while also ensuring that every major airline alliance is covered.





[Edited 2013-04-19 20:50:24]

User currently offlineupwardfacing From British Indian Ocean Territory, joined Apr 2013, 165 posts, RR: 0
Reply 31, posted (1 year 7 months 1 week 3 days ago) and read 5831 times:

Has any US carrier served PPT since maybe Pan Am?

User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 32, posted (1 year 7 months 1 week 2 days 23 hours ago) and read 5835 times:

Quoting upwardfacing (Reply 31):
Has any US carrier served PPT since maybe Pan Am?

Hawaiian still does, with a flight from Honolulu every Saturday which serves principally for Tahitians to go shopping at lower prices.

Hawaiian also used to fly from LAX to PPT until the early 2000s, and Continental flew to PPT in the late 80s and early 90s.

The Air NZ and Qantas flights from LAX always had around 70%+ American passengers.


User currently offlineMercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 33, posted (1 year 6 months 4 weeks 12 hours ago) and read 5402 times:

In Tahitian media there is story that Air France had to reveal as result of ongoing court case versus its unions that the PPT line lost almost €8mil in the last year and accumulated losses deficit amount to €69.5mil the last 7-years in the route.

So while AF has seek to transform its position in Tahiti gateway with new crew agreement signed last December, in long run it might simply favor to exit market completely if it can utilize JV with TN instead.

Quoting upwardfacing (Reply 31):
Has any US carrier served PPT since maybe Pan Am?

Yes.

Besides current Hawaiian, Continental serve with DC-10 in the 1990s from LAX. Also Aloha Airlines were applying to use 737 in 2000's but they went bankrupt first.

Also when cruise industry was active before, there was lots of charters from America - United, ATA, Omni Air etc.


User currently offlineLAXintl From United States of America, joined May 2000, 26022 posts, RR: 50
Reply 34, posted (1 year 6 months 3 weeks 6 days 12 hours ago) and read 5047 times:

Makes you wonder why a alleged commercial enterprise like Air France would stick with such loss making route year after year.

Surely they don't have requirement to have to maintain colonial links in the face of such losses any longer.



From the desert to the sea, to all of Southern California
User currently offlineORDTLV2414 From United States of America, joined Mar 2013, 325 posts, RR: 0
Reply 35, posted (1 year 6 months 3 weeks 6 days 11 hours ago) and read 4988 times:
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TN just doesn't have the same quality as AF. hands down.

User currently offlinepapatango From United States of America, joined Dec 1999, 526 posts, RR: 0
Reply 36, posted (1 year 6 months 3 weeks 6 days 11 hours ago) and read 4950 times:

I don't see anything in this deal which will benefit Delta.

User currently offlineMarcus From Mexico, joined Apr 2001, 1807 posts, RR: 2
Reply 37, posted (1 year 6 months 3 weeks 6 days 10 hours ago) and read 4942 times:

Quoting koruman (Reply 30):
Ultimately, the question has to be whether it is more important to reopen the Hotel Bora Bora, Bora Bora Lagoon Resort, Sofitel Tahiti, Hyatt Tahiti, Sheraton Tahiti et al or to make Air Tahiti Nui require less subsidies.



WOW!!! all of those are closed now? I was in Tahiti back in 2001 and is one of my best vacations, flew an AirLib A340 from LAX, once at PPT there were a couple of Corsair 747's, a 767 from HA I believe and another widebody that I do not remember the airline.

A couple of years ago when I was pricing a vacation to go back the prices were, and I'm not kidding, 3.5 times higher than what I paid the first time for a similar itinerary!!!....do I decided to vacation elsewhere.



Kids!....we are going to the happiest place on earth...TIJUANA! signed: Krusty the Clown
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 38, posted (1 year 6 months 1 week 6 days 11 hours ago) and read 4507 times:

Quoting papatango (Reply 36):
I don't see anything in this deal which will benefit Delta.

They gain additional flight and partner across Atlantic joint-venture.


User currently offlinekoruman From , joined Dec 1969, posts, RR:
Reply 39, posted (1 year 6 months 1 week 6 days 6 hours ago) and read 4341 times:

There has been a change of government in French Polynesia since this thread was started, and I have arrived at the following conclusions:

1) The best interests of Air Tahiti Nui are not in the best economic interests of French Polynesia,

2) In particular, now in 2013 what is good for Air Tahiti Nui's finances is bad for French Polynesia's in general, and the hotel sector in particular.

3) The best interests of Air France are still different.

Air Tahiti Nui and Air France are both financially unviable in French Polynesia due to horrendous overmanning.

To re-use an old example, Air New Zealand has 5 staff in French Polynesia for 2 return flights on a 767. Air France from memory has 88 full-time staff for 3 return flights on a 777.

At the end of the day, overall tourist numbers to French Polynesia are down 40% while the comparable market in Hawaii is at a historic high point.

Part of this is due to the ill-timed exit of Air Tahiti Nui from Sydney just as Australia entered a boom period. We now have the absurd situation wherein neighbouring Rarotonga has non-stop flights from Sydney, yet Tahiti doesn't. And whereas five years ago Sydney was the only port with non-stop flights to Hawaii, now Melbourne and even Brisbane do too. I am embarrassed, but the people running French Polynesia and Air Tahiti Nui either haven't noticed or don't care.

For me, the bottom line in civil aviation for French Polynesia is this:

The market they want to restore, need to restore, is North America west of the Rockies.

Yet all their current plans focus on OneWorld and Skyteam even though Los Angeles, San Francisco, Vancouver and Phoenix are all Star Alliance hubs and citadels.


User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 40, posted (1 year 6 months 1 day 10 hours ago) and read 3877 times:

Quoting koruman (Reply 39):
1) The best interests of Air Tahiti Nui are not in the best economic interests of French Polynesia,

2) In particular, now in 2013 what is good for Air Tahiti Nui's finances is bad for French Polynesia's in general, and the hotel sector in particular.

I think many realize the interest of the TN and the broader interest of FP and industries like hotels diverge long time ago.

In concept it was maybe interesting idea for form airline and many support it, but in practice it end up restraining the market, and create major deficits for the government bank accounts.

Focus at moment however is not to eliminate airline, but to desperately look to minimize loss, and maximize revenues to breakeven. So this agreement with AF is part of effort. Maybe create further monopoly.
There is also recent talk of trying to get TN and VT to cooperate more, and maybe reduce duplication of headquarters functions and to market closer each flights more.

Quoting koruman (Reply 39):
To re-use an old example, Air New Zealand has 5 staff in French Polynesia for 2 return flights on a 767. Air France from memory has 88 full-time staff for 3 return flights on a 777.

Yes but AF has a crew base in Tahiti. Air NZ does not.
Take away the crew base and AF is really only left with local ticket office and airport staff. Not too bad.

But yes AF says it losses money in Tahiti regardless - as reply 33 above, AF say the route lose €8mil in the last year and accumulated losses deficit amount to €69.5mil the last 7-years on the Tahiti line.

Quoting koruman (Reply 39):
For me, the bottom line in civil aviation for French Polynesia is this:

The market they want to restore, need to restore, is North America west of the Rockies.

Yet all their current plans focus on OneWorld and Skyteam even though Los Angeles, San Francisco, Vancouver and Phoenix are all Star Alliance hubs and citadels.

TN already have same 10-12x weekly service to West Coast premier market of Los Angeles, so I am not sure what there is to "restore".
They also have FF links to both AA and DL. I bet they would be happy to also form one with UA. But its up to UA to be open to such idea ultimately.

TN has also said it does not seek to enter alliance as it would not only be costly, but carrier seeks to cooperate with various airline regardless of alliances (for example QF). Focus on only single alliance members like Star would be a mistake.


User currently offlineIrishAyes From United States of America, joined Jan 2008, 2230 posts, RR: 15
Reply 41, posted (1 year 5 months 3 weeks 4 days 13 hours ago) and read 3420 times:

Interesting article from CAPA. The one thing that I'm struggling to grasp is how this is a win-win for both carriers, as to me, this does not really seem to solve the AF situation in PPT. What advantage are they (AF) gaining from revenue sharing on the LAXCDG sector that can help them with their LAXPPT services?

http://centreforaviation.com/analysi...as-losses-continue-to-mount-111781



next flights: jfk-icn, icn-hkg-bkk-cdg, cdg-phl-msp
User currently offlinemercure1 From French Polynesia, joined Jul 2008, 1682 posts, RR: 2
Reply 42, posted (1 year 5 months 2 weeks 4 days 7 hours ago) and read 3035 times:

Quoting IrishAyes (Reply 41):
The one thing that I'm struggling to grasp is how this is a win-win for both carriers, as to me, this does not really seem to solve the AF situation in PPT.

Well across Atlantic it adds a frequency to the Joint Venture for partners to sell.

It also links the AF CDG network and connections nicely with the TN flight.

Yes AF itself continues to lose money on PPT route, but I dont think we have reached the final decision yet of what will happen here. Let his new Atlantic JV start, and maybe AF will quietly expand it, and slip away from its own PPT services.


User currently offlinedavescj From United States of America, joined Jun 2007, 2307 posts, RR: 0
Reply 43, posted (1 year 5 months 2 weeks 4 days 3 hours ago) and read 2880 times:

Quoting LAXintl (Thread starter):
(the local LAX-PPT segment is not covered in the proposal)

You would think this would be desired in the JV. I wonder why it was left out.

Quoting LAXintl (Thread starter):
Air Tahiti also seeks to link with other Air France immunized alliance partners Alitalia, Delta, and KLM, TN's current single trans-Atlantic route enabling carriers to increase service options, and enhance competitiveness for unaligned TN.

What does this actually bring? One more LAX- CDG flight? That's it? Or am I missing another flight? Currently, AF has an A380 and 777 daily.

Quoting ScottB (Reply 12):
TN lacks the market presence and frequent flyer loyalty in LAX & CDG to effectively compete on the LAX-CDG route, and a fair number of the LAX-PPT seats will be taken by U.S.-originating customers. So operating a half-empty LAX-CDG sector will be very, very costly.

Could they not fill the seats as a tour carrier? Surely there is a good deal of LAX-CDG traffic. If TN could offer a "cheapish" J (say at what Y+ on others costs) they should be able to fill the seats. They could then have more "low cost" redemptions.

Quoting papatango (Reply 36):
I don't see anything in this deal which will benefit Delta.

I was thinking the same thing unless TN were to enter ST and bring other routes.

Dave

Again, unless it was to see seats on another LAX-CDG daily. But how much is the flight losing? Then again, DL could use it to get seat redemptions.

Quoting mercure1 (Reply 38):
They gain additional flight and partner across Atlantic joint-venture.



Can I have a mojito on this flight?
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