Fakalofa lahi atu
I have received some information on Niue Airlines from a source who doesn't want to be known. I quote:
Niue Airlines did operate early 1990's. They chartered Air Nauru for a number of months until they were given the elbow by the Niue govt for not maintaining services on a consistent basis. They would
occasionally cancel flights if there was insufficient passengers or freight to make it pay!
There is a very close connection between Niue Airlines and Coral Air by way of a certain Ray Young. He operated Niue Airlines and was "consultant" to Coral Air. He wasnt a director, etc as he was a bankrupt and unable to hold any governing position with any
I have just found an interesting press release put out by the Niuean government, and by the sounds of it, corruption and scammers are not only for the larger countries.
SETTING THE RECORD STRAIGHT: CABINET STATEMENT
In a bid for political power Toke Talagi has manipulated some Members of the Assembly to go
against the Government because he does not like Cabinet’s handling of the air services issue.
The truth is, Toke Talagi is using the air services issue as a disguise (blinder) for his real agenda,
which is that he wants to be the Premier. In a letter to Cabinet Toke Talagi demanded that
Premier Sani Lakatani steps down and let the so called four independent Members, being himself,
Va’ainga Tukuitonga, Hima Takelesi and Billy Talagi, appoint two of them as Ministers, one of
them to be the Premier (presumably Toke Talagi himself).
With the support of the other 3 Members, Toke Talagi accuses the Government of making wrong
decisions. His argument is as follows:
Niue will not own or control Coral Air Niue.
Government should explore other options
Government will kick out Royal Tonga Airline once Coral Air starts operating
Niueans do not want to travel in small aeroplanes
Cabinet did not listen to his advice
Ray Young is an undischarged bankcrupt businessman.
These accusations by Toke Talagi are a distortion of the facts, calculated to mislead the people of
Niue. The facts are as follows:
Ownership and Control of Coral Air
It is Government policy not to become directly involved in business ventures if these can be
undertaken as private sector operated enterprises. Where necessary the Government facilitates
the establishment of businesses by providing loans and or joint venture shareholding. In the case
of Coral Air, the Government decided to lend the company US$360,000 to establish a Niue based
regional air service network mainly to bring tourists to Niue who transit through Fiji, Tonga, the
Samoas, Rarotonga, Tahiti and other countries in the Pacific. The Government considered the option
of taking substantial shareholding in Coral Air but decided on a loan to the Company repayable after
two years, plus 5% interest. Before making any important decisions concerning Coral Air Cabinet
retained an independent and highly reputable,legal adviser, in New Zealand, John Collinge, to advise
the Government on how best to protect Niue’s interests in relation to Coral Air. John Collinge was
a former President of the New Zealand National Party who was also a former New Zealand High
Commissioner in London, the United Kingdom of Britain. Mr Collinge advised the Government not
to take shares in Coral Air but to provide a loan. Mr Collinge was also the principal adviser in the
preparation of the formal agreements between the Government and Coral Air. It can be seen that
Cabinet has not acted in ignorance or without expert advice.
The accusation that Niue will have no control over the air service Coral Air is to provide is wrong.
Why? Because firstly there are two Agreements between the Government and Coral Air – one, a
Loan Agreement which sets out the terms and conditions for the loan of US$360,000. The other
is the main Agreement which sets out the terms and conditions for Coral Air to provide the Niue
tourist industry an air service. Secondly, the operational headquarters of Coral Air will be here in
Niue. The 11 pilots, engineers and other operations crew will live here under the watchful eye of
the people and the Government. Also these people will be contributing to the economy as they
and their families will live here. Thirdly, Coral Air have to operate under the terms and conditions
set by the Government in accordance with an Air Service Operators License only the Government
can give. In other words, Coral Air will have an obligation to serve Niue’s best interest, while at the
same time have the necessary freedom to carry out its business just like any other commercial airline.
Toke Talagi’s accusation on ownership and control is therefore ill-informed and unfounded.
What other options!
It is high time people such as Toke Talagi get real and stop dreaming. The fact is, Niue does not
have the luxury of options by way of air services. The air service industry is a complex and highly
competitive one – especially for small island countries like Niue. Air New Zealand, for example,
has had the air rights to fly to Niue ever since Hanan International was opened in 1970. Likewise,
Polynesian Airlines, Air Pacific of Fiji have the rights to fly to Niue. But these airlines don’t fly to
Niue because its not worth their while. Air Nauru was the only airline that served Niue’s needs for
a few years. That was because of the friendship developed between Niue and Nauru. (thanks to
the late Sir Robert Rex and the late former President of Nauru Hammer De Roburt) Air Nauru
provided a cheap fare service for Niue because Nauru saw itself as a small nation helping another
tiny nation. But in the end, it had to pull out because it was costing too much. When the former
Frank Lui Government refused to agree to a fare increase from $600 return (Niue/Auckland) to
$800 asked for by Air Nauru in 1993, that was when Nauru pulled out. One ill-informed, but very
vocal would be politician at the time on BCN TV referred to Air Nauru as "A Mickey Mouse airline".
That very same politician had 6 years in Government to replace ‘Mickey Mouse’ but what did he do?
Zero in capital letters. So now the very same politician has joined Toke Talagi’s wagon to knock
Coral Air so Niue can go back to Zero again.
When in 1988-1989 Niue was left with no air service at all, a small airline, Samoa Air of Pago Pago
came to the rescue using much smaller aircraft than the 18 Seater Beech 1900 Coral Air will use.
Then in the period 1991/1992 the late Sir Robert Rex Government had to charter the Polynesian
Airline Boeing 737 jet to restore a service between Niue and Auckland, not for tourists but for the
ordinary Niuean traveler. The cost for that charter service got too high so Sir Robert’s Government
asked Polynesian Airlines to offer a commercial service. Polynesian Airlines reply was, they will do
it on condition the Niue Government would guarantee to pay them $1million a year. This year, Air
Rarotonga has offered to provide a similar service to that Coral Air will provide. All very well, but
Air Rarotonga wants $1.13 million from the Niue Government to help them buy a new small aeroplane.
The Frank Lui Government used to subsidise Royal Tonga. In 1995/96 to 1997/98 the subsidy paid
by Government to Royal Tonga totalled $617,000.
Toke Talagi says Niue should own and operate its own airline. Very good, that’s what we all want.
The problem is Toke Talagi knows it will cost the Government and the people a lot more money than
the US$360,000 the Government has loaned to Coral Air. Moreover, Toke Talagi’s "pie in the sky"
idea has not even started or explored. On the other hand Coral Air is ready to fly the Niue Flag in
2 weeks time.
So where are these mysterious or mythical air services options going to come from?.
C. Royal Tonga Airlines
(1) According to Toke Talagi, the Government intends to kick out Royal Tonga once Coral Air starts
operating. That is a Black Lie. Very early in the piece when the NPP led Government assumed Cabinet
seats, on the 20th of April 1999 the Premier wrote to the Minister of Civil Aviation of the Kingdom of
Tonga advising that Niue intend to be involved in the establishment of a Niue air service to be provided
by Coral Air. Premier Lakatani’s letter assured the Government of Tonga that there was no intention to
do away with the Royal Tonga service. The Tonga Minister of Civil Aviation who is also the Chairman
of Royal Tonga replied as follows:
"Transport and communications for small island developing states is not only essential but critical for our
livelihood and development. I fully understand and respect the course of action you have decided to take
and I am aware that it is critical for Niue. Tonga and Royal Tonga Airlines will be more than willing to
cooperate with you for the benefit of both our countries and people".
(2) Not long after this, the General Manager of Royal Tongan Airlines, Mr Jim Bradfield had a meeting
with the Premier at the airport VIP lounge. Mr Bradfield told the Premier that Royal Tongan welcomed
the Coral Air proposed services because Tonga was planning to stop the mid-week Hawker-Siddley
748 service between Tonga and Niue. On 11 October 1999, Royal Tongan Airlines informed Premier
Lakatani by letter that from 1 December 1999 they will withdraw the once a week HS 748 service
between Tonga and Niue. Royal Tonga stated as follows:
"This timing also seems to be consistent with the introduction of Coral Air on the route…"
Niueans Don’t want to travel on Small Planes
Its true, people prefer to travel on big jet aeroplanes such as Royal Tonga’s Boeing 737. But people
can be assured that the Royal Tonga jet service to and from Auckland will continue. There is no
question about that.
Coral Air will operate two (2) 18 seater Beech 1900 aeroplanes which are ideal for short distance
travel such as between Niue and Tonga. These planes are modern and faster than the HS748 used by
Royal Tonga to operate the Thursday service to Niue.
The Coral Air service is mainly for tourists but for business and other travelers the advantage will be
that Coral Air offers a service which allow people to leave or come to Niue several times a week to
connect up with main trunk services in Fiji, Tonga, Samoa and Rarotonga, especially through Tonga.
At present, Air New Zealand, Polynesian Airlines operate several flights to and from Auckland through
Tonga. In addition, Royal Tonga operates a weekly service to Sydney, Australia. With Coral Air
operating several times a week to Tonga, people will be able to travel virtually any day of the week in
and out of Niue, especially to catch connecting flights to Auckland.
Above all, tourists from North America, New Zealand and Australia will have regular services to come
and go from Niue. Coral Air will also be working towards code sharing packages with bigger airlines
such as Air New Zealand and Quantas.
The reality is that the Coral Air services is Government’s answer to the need to boost the tourist industry.
Between Niue and New Zealand some $20 million has been invested in the Niue tourist industry such as
the Matavai Resort, the Niue Hotel and all the Motels have, and are still losing money. Why? Because
there are no tourists flying in. So what the Government is doing now is lending Coral Air a relatively
small amount of money (US$360,000) to save a $20million industry, Niue’s main hope for the economy.
Disagreement Between Toke Talagi and Cabinet
Cabinet appointed an Advisory Committee, chaired by Toke Talagi as Associate Minister for Civil
Aviation, to deal with the process of negotiating in detail the issues involved in getting Coral Air off the
ground. The Advisory Committee was appointed by Cabinet on 20th April 1999. Toke at the time raised
no objection to Cabinet’s decision to proceed with Coral Air. The first step in the process was for Coral
Air to secure the lease of two aircrafts from a supply company in Wichita, Kansas in the United States of
America. The company, Raytheon Aircraft Ltd, advised Coral Air and the Government that it would not
commit 2 aircrafts for the Niue service until a deposit of US$100,000 was paid up. Toke Talagi was the
person who communicated directly with Raytheon Aircraft company about the transfer of the money to the
Company. This was clearly the point of Cabinet’s decision to proceed with the Coral Air project. Toke
Talagi supported that decision of Cabinet at that point.
Then on the 19th July 1999, Premier Lakatani received an urgent request from heart specialist that he had
to go to Auckland for a triple by-pass heart operation. Premier Lakatani asked Toke Talagi to go with him
to help finalise negotiations with Coral Air. During negotiations with Coral Air Toke Talagi, for the first time,
openly disagreed with the Premier. Toke Talagi knowingly that the Government was committed to the Coral
Air project argued with the Premier in front of other people. The upshot was, Premier Lakatani accused Toke
Talagi of having a different agenda and a "conflict of interests".
From then on, Toke Talagi worked against Coral Air and Cabinet. What he forgot was that it was Cabinet
who had the mandate to make the decisions, not him.
The questions people have to ask themselves now are:
.. Why did Toke Talagi changed his mind about Coral Air?
.. Why did he decide to become disloyal to the Government at the very time when Premier Lakatani was about
to go through a life and death heart operation?.
As Associate Minister of Civil Aviation, Toke Talagi was assigned the task of obtaining Air Services Agreements
between Niue and neighbouring countries such as Samoa and Tonga as a matter of urgency.
He traveled overseas twice for that purpose. He failed, and it is possible he probably failed deliberately. For
example, how come that immediately after the 25th Celebrations, the Deputy Premier, Young Vivian went to
Tonga and Samoa and got their agreement to let Coral Air fly in and out of their countries.
How come also that both Tonga and Samoa are happy to welcome into their countries the services Coral Air
intend to provide. Again, it is up to you the people to work it out. But as far as your Government is concerned
you know the answer to those two questions.
The Ray Young Issue
How sad that Toke Talagi and his supporters are using Ray Young as a whipping block for a political
football. Some people here have a grudge against Ray Young from the time he operated Niue Airlines.
The fact is, when Niue was left without any air service at all in 1988/1989 only two people came to
our rescue. Ray Young and Connie Porter of Samoa Air in Pago Pago. Connie Porter’s Samoa Air
used her 10 seater Twin Otter plane to take Niueans to Pago to get on to connecting flights to Auckland.
Ray Young at the same time, with no help from the Government set up Niue Airlines for Niueans to go
between Niue and Auckland at his own cost. Ray Young’s business partner was Peter Warner’s Niue
Trading Company. Niue Airlines shareholding was 50% for Ray Young and 50% for Peter Warner.
When Niue Airlines started to become a good business Peter Warner had a business argument with Ray
Young, because Peter Warner, wanted to control Niue Airlines by asking for 51% of the shares. Ray
Young refused. The business deal between Ray Young and Peter Warner was that Niue Trading guaranteed
up to $100,000 at any one time to keep Niue Airlines going. When Niue Trading didn’t get its way, it pulled
the plug on Niue Airlines. So Niue Airlines and Ray Young went down the tube. That is how and why Ray
Young eventually become an undischarged bankcrupt.
How did Ray Young became involved in Niue in the first place?
In 1988/1989 the then Secretary to the Government, Terry Chapman was in New Zealand on 1 year
Sabbatical Leave. Hima Takelesi (Douglas) was the Acting Secretary to the Government for that 1 year
period. The then Premier, the late Sir Robert and Hima contacted Terry Chapman in Wellington to see if
something could be done with the New Zealand Government about Niue’s not having an air service. At
the same time Sani Lakatani working for National Mutual Insurance Company became concerned. So
through Sani Lakatani’s business people in Auckland, led by Ray Young, asked to talk to Terry Chapman
even though he was on leave. Why? Because they wanted to help. Ikipa Tongatule was the Niue Consul in
Auckland at the time. He organised meetings between Terry Chapman and Ray Young and business associated.
The outcome was Niue Airlines.
When Cyclone Ofa struck Niue in February 1990 Ray Young recruited 23 workers from New Zealand to
help repair damage caused, including the Niue Hotel, Niue Hospital and other damaged areas. These people
were brought up personally by Cabinet Minister of the New Zealand Government Hon. Roger McClay.
In addition Ray Young sponsored several free travel tickets for fund raising projects, such as the Alofi
Ekalesia tennis Court which Toke Talagi was involved in ordering the materials for that project.
Today, we have Ray Young still wanting to help Niue even though he is an undischarged bankcrupt. Why?
Because the 8 month old Government led by Sani Lakatani is determined to do something positive about
Niue’s tourist industry and Coral Air and the Government are both taking the risk, which no one else
seems to have wanted to do in the last 6 years.
Ray Young is not a shareholder of Coral Air, he is an adviser. Coral Air has applied to the New Zealand
Assignee to allow Ray Young to be employed by Coral Air.
Some ill informed people, including Toke Talagi, have allegedly been accusing Ray Young of being a crook.
Before people go around accusing others of being crooks, why don’t they look in the mirror first. At least
one of Ray Young’s accusers, for example, owe the Government and the people at least $150,000.
The owner of Coral Air is an Auckland Barrister and Solicitor, Mr Robert Warburton and two other
shareholders. The Lord said, before you try to pick the spec from your brother’s eye remove the log in yours first.
Sani E L Lakatani
5 November 1999