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mercure1
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Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 3:02 pm

Here we go again. Everyone know the situation is not sustainable, so territorial legislative chamber has issued a report on review and performance of Air Tahiti Nui since 2008.

No surprise, report comes to conclusion that airline has "has failed to take its destiny", and its financial state was "overwhelming".

The company which accumulated €72.9mil Euro losses last 4-years, was found to have multiple reasons for its difficulty including:
@ Constant management upheaval (5 CEO's in 4 years)
@ Global economic crisis
@ Rising fuel cost
@ Inability to rid itself of excess fleet capacity (5th A340)
@ Inability to secure timely partnership/alliances
@ Inability to reduce cost and optimize staff


To help straighten the 85% government owned company, the ministers of government have agreed a "Strategic Development Plan" will adopted by end of the year

Focus of plan will be:
@ Review and of classes and product
@ Consider sourcing smaller aircraft model
@ Seek outside party financial contribution support for heavy loss making yet critical markets (eg Tokyo line lose €5.0/ year).
@ Possibility of establish links to regional markets (Easter, Cook, Fiji)
@ Create seasonal fare tariff to aid development of tourism in French Polynesia.
@ Prudent approach to fuel hedging to minimize risk and avoiding previous devastating price spikes
@ Secure freight business to better utilize capacity
@ Real reduction in personal cost. Even with recent adjustments staff expenses grow at 4.1% per annum far outpace turnover gain which was only 1.2%


The legislative report (in French) can be downloaded here:
http://www.tahiti-infos.com/attachment/446656/



Lets see what if anything changes. But I think the government finally understand that the territory is unable to place excess of €10mil from an already limited budget into the airline company year after year as the accounts continue to grow in the red.
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aerorobnz
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 3:16 pm

Yep, it's time to wrap it up IMO. Such a waste of money to even continue TN as an airline.
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lightsaber
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 3:34 pm

Are they willing to give the management more control? If not the problems will persist. Will they hire a team that is there to manage a business first? Right now Air Tahiti has more mandates than is possible to manage. Costs must be dramatically reduced to save the island's economy.

I see tremendous potential for Air Tahiti Nui, but the required cost cutting will be brutal.

Personally, I would outsource to NZ with an agreement on hiring Tahiti staff and a risk sharing agreement on routes to ensure minimum seat capacity is maintained.

With that NRT route being the only really long (5100nm) route that I'm aware off, Air Tahiti needs to think shorter range aircraft. Short term A333s. Long term? And fewer aircraft is better. Encourage other airlines to fly to PPT again so that the hotels will fill up again.

Quoting mercure1 (Thread starter):
@ Create seasonal fare tariff to aid development of tourism in French Polynesia.

That requires a dramatic drop in CASM that won't be achieved with the A343s, current utilization, and current staffing levels.

Quoting mercure1 (Thread starter):
@ Seek outside party financial contribution support for heavy loss making yet critical markets (eg Tokyo line lose €5.0/ year).

I think we could come up with a collection for 5 Euros per year.        

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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 3:55 pm

Ah the TN drama continues. Always fun to count on the drama - a mini Alitalia.   

Quoting mercure1 (Thread starter):
@ Constant management upheaval (5 CEO's in 4 years)

Politics. Changes in government = changes in management.

For all effects, the airline is almost another government ministry.

Quoting mercure1 (Thread starter):
@ Global economic crisis
@ Rising fuel cost

Well, everyone has to deal with this, not just TN. However TN was loss making before the global malaise.

Quoting mercure1 (Thread starter):
@ Inability to rid itself of excess fleet capacity (5th A340)

Certainly having 20% excess capacity is costly, but with A340 not exactly a hot commodity no surprise they are having trouble.

Quoting mercure1 (Thread starter):
@ Consider sourcing smaller aircraft model

What are they looking at A330s? or they mean something smaller like A32x like AirCalin?

Quoting mercure1 (Thread starter):
@ Seek outside party financial contribution support for heavy loss making yet critical markets (eg Tokyo line lose %u20AC5.0/ year).

Sure go after tourism partners. If route like Tokyo is so important to them maybe they can kick in some cash.

Quoting mercure1 (Thread starter):
@ Possibility of establish links to regional markets (Easter, Cook, Fiji)

With A340s that would be a disaster. Need smaller equipment definitely.

Quoting mercure1 (Thread starter):
@ Real reduction in personal cost. Even with recent adjustments staff expenses grow at 4.1% per annum far outpace turnover gain which was only 1.2%

Again likely politics. Hard to shed bodies on an island where everyone is the cousin, brother, sister, etc, of someone in influence.

Quoting lightsaber (Reply 2):
Are they willing to give the management more control? If not the problems will persist.

Like I mentioned prior, as governments change, so does the management at TN. Management can have control, but ends up serving the whims of the political party in charge at the time.

Quoting lightsaber (Reply 2):
Will they hire a team that is there to manage a business first?

They did that. Brought in a CEO from France. When he made tough recommendations, staff and politicians balked, and they soon sent off with his bags back to Europe with a more acceptable person being put in charge from the presidents cabinet.


Quoting lightsaber (Reply 2):
With that NRT route being the only really long (5100nm) route that I'm aware off, Air Tahiti needs to think shorter range aircraft. Short term A333s.

Dont forget the Paris run via LAX. 5000nm and long run especially west bound.
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mercure1
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 4:49 pm

Quoting LAXintl (Reply 3):
Politics. Changes in government = changes in management.
For all effects, the airline is almost another government ministry.

Yes issue has always been as primary shareholder, the presidential office has influence on the airline with appointment of its board of directors and executives.

Often such positions are given out based on political reward, or friendship and not strictly on business acumen.

Quoting LAXintl (Reply 3):
Certainly having 20% excess capacity is costly, but with A340 not exactly a hot commodity no surprise they are having trouble.

They try hard to find charter work for the 5th aircraft, but they have not been able to generate enough revenues to cover its cost.
Last I heard with big finance payments, they have not been able to find a sale either that not create financial defecit.


Quoting LAXintl (Reply 3):
Sure go after tourism partners. If route like Tokyo is so important to them maybe they can kick in some cash.

Yes they have mentioned this before. Maybe local hotels and or Japan tour operators help to finance the route a little.

Quoting LAXintl (Reply 3):
Hard to shed bodies on an island where everyone is the cousin, brother, sister, etc, of someone in influence.

Social condition on islands is not exactly good, so creating more unemployed or social upheaval is something government wants to avoid certainly.

Quoting LAXintl (Reply 3):
They did that. Brought in a CEO from France. When he made tough recommendations, staff and politicians balked, and they soon sent off with his bags back to Europe with a more acceptable person being put in charge from the presidents cabinet.

Yes Mr. Pastour made some tough ideas in his one year at TN and quickly found himself in opposition with employees which pressured government to terminate his contract.
Not the first time, frank ideas cause loss of position for TN managers. Its a tight line to walk to satisfy many constituents involved.
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 4:54 pm

Quoting lightsaber (Reply 2):
I see tremendous potential for Air Tahiti Nui

So do I. Not only because Tahiti is a dream destination per se, but also due to its perfect location in the South Pacific : PPT could become a hub for the growing South America to Asia market.



Quoting LAXintl (Reply 3):
a mini Alitalia.

Indeed, many similarities : political interference, mis-management, insufficient size, stand-alone carrier, union issues, etc...



Quoting LAXintl (Reply 3):
Need smaller equipment definitely.

Agreed. SB can serve as an example : a couple of A330s + 1 A320. Not sure about ETOPS though.



Quoting LAXintl (Reply 3):
If route like Tokyo is so important to them maybe they can kick in some cash.

NRT is a gateway to Asia, no doubt it is a critical destination. But I am not sure TN is the right carrier on NRT-PPT.
AF could be encouraged to fly the route : it has a better brand recognition and a stronger marketing power in Japan (one of its main international markets).
Instead, TN could serve South America (GRU for a start). LAN 1X weekly flight to SCL through IPC does not really help Tahiti and her islands.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 5:04 pm

There was a TV report the other day about how French Polynesia is a fiscal paradise, their autonomy means they do what they want with taxes and expenses. With that in mind I don't understand why the French taxpayer (of which French Polynesians are not part) should foot any bill towards the islands !

I'm all for helping struggling territories (and it is clear all French islands will cost money for the foreseeable future) but not if people living there are not part of the solution, it reminds me of Corsica.
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 6:03 pm

Quoting Azure (Reply 5):
. Not sure about ETOPS though.

There is a bit of a fly around PPT-LAX. NZ did it for years with their 767-300ER's.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 6:42 pm

Why do they not just shut down the airline and have AF build a mini base there with 3-4 A330 aircraft to take over the routes? They could employ locals as cabin crew and ticket/gate agents. Then contract with another airline to offer service on shorter flights with narrow body aircraft. This way, tourists would still arrive and the economy would not be hurt. And, the airservice may actually become profitable.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 7:54 pm

Quoting LAXintl (Reply 3):
Quoting lightsaber (Reply 2):
With that NRT route being the only really long (5100nm) route that I'm aware off, Air Tahiti needs to think shorter range aircraft. Short term A333s.

Dont forget the Paris run via LAX. 5000nm and long run especially west bound.

TN also operated JFK-PPT nonstop for a few years, starting in 2005. I guess that was their longest nonstop at 5465 nm, 390 nm further than PPT-NRT.
http://www.airtahitinui-usa.com/company/presscontent.asp?id=47

These passengers weren't very happy with TN's service on that route in 2008.
http://content.time.com/time/travel/article/0,31542,1852836,00.html
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 8:59 pm

There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

So, same model as with SB to NOU via KIX and NRT for the CDG service.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 9:31 pm

Quoting DDR (Reply 8):
Why do they not just shut down the airline and have AF build a mini base there with 3-4 A330 aircraft to take over the routes? They could employ locals as cabin crew and ticket/gate agents. Then contract with another airline to offer service on shorter flights with narrow body aircraft. This way, tourists would still arrive and the economy would not be hurt. And, the airservice may actually become profitable.

I doubt AF has any appetite for such ventures these days, especially considering the ongoing losses they incur flying to Tahiti. The more likely scenario for AF is to leave PPT completely, as they have done with NOU already.



Quoting goldorak (Reply 10):
There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

   Yes this is the model UTA employed with AF for many decades. Seems logical to revert to such cooperation.
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 9:59 pm

Quoting goldorak (Reply 10):
There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

This is actually a brilliant idea. Would certainly cut the losses for both airlines. Probably too much politics involved to see this happen though. If the flights to Japan do not make money, but are important, could they not receive some types of incentives from both sides to at least get the flights to break even?

Would it also be possible for someone like Air New Zealand to buy a couple of more frames and operate the flights since they are well established in the South pacific?
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 10:09 pm

They have the same A340 problem every airline has, they use too much fuel. A330 would be the 5 to 10 year solution then 787 would be best, A350-900 are too big.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Fri Nov 22, 2013 11:55 pm

Quoting jfk777 (Reply 13):
787 would be best, A350-900 are too big.

Why not an Airbus 350-800 ?
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 12:39 am

Quoting Mortyman (Reply 14):
Why not an Airbus 350-800 ?

will Airbus make the A350-800 ? Looks ever less with the -1000 becoming the 777 compeitior. Shrink version are dogs, look at how the A318 sold.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 1:04 am

Quoting jfk777 (Reply 15):
will Airbus make the A350-800 ? Looks ever less with the -1000 becoming the 777 compeitior. Shrink version are dogs, look at how the A318 sold.

From what I can see from Wikipedia ( yes I know, perhaps not the most accurate source ) , it has 79 firm orders
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 1:11 am

How is TN going to compete in a few years when hundreds of 787s and A350s fill the skies?

Quoting LAXintl (Reply 3):
Like I mentioned prior, as governments change, so does the management at TN. Management can have control, but ends up serving the whims of the political party in charge at the time.

Then TN is doomed. Just shut it down if the airline management isn't allowed to manage the airline with a few mandates from the government. Right now the mandates TN must fulfill ensure a death spiral.

Either break the mold or write an Eulogy.

Quoting LAXintl (Reply 3):
Dont forget the Paris run via LAX. 5000nm and long run especially west bound

Then let a partner fly that route. Get NRT and CDG off the route map and focus on where flights from PPT can make money and bring in numbers. LAX-CDG is not a low competition route for a little airline. Partner with AF and put seats on an A380 to cut CASM.

Quoting Azure (Reply 5):
Quoting lightsaber (Reply 2):
I see tremendous potential for Air Tahiti Nui

So do I. Not only because Tahiti is a dream destination per se, but also due to its perfect location in the South Pacific : PPT could become a hub for the growing South America to Asia market.

   That is where TN should be thinking. But it will take a few years of running the airline as a business to turn it around. Which is why I think the best solution is phase out TN and replace them with a new carrier. (Best short term choice would be NZ.)

Quoting Azure (Reply 5):
NRT is a gateway to Asia, no doubt it is a critical destination. But I am not sure TN is the right carrier on NRT-PPT.

I would argue it is time to work with the asian airlines. NRT is *not* the best choice of an asian gateway for Chinese customers. I'm not sure what would work better, but change must come.

Quoting goldorak (Reply 10):
There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

   And then turn PPT into a regional hub. Consolidate to profit and then grow.

Quoting DDR (Reply 8):
Why do they not just shut down the airline and have AF build a mini base there with 3-4 A330 aircraft to take over the routes?

Good solution. Either AF or NZ. I have no horse in the race. But TN has failed. France will have to reduce subsidies which will end the TN experiment. Or... the airline could be reformed. But I see no well which means a spectacular failure that hurts the whole island economy.


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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 4:20 am

Quoting LAXintl (Reply 3):
Like I mentioned prior, as governments change, so does the management at TN.

I thought about this a little more. This has created so much chaos at TN, I do not see them recovering.

I wish Tahiti well, but I do not think forming a subsidized airline was a wise move as that scared out competitors. I'm trying to figure out a solution that works long term with TN and... I cannot.

Quoting Mortyman (Reply 16):
Quoting jfk777 (Reply 15):
will Airbus make the A350-800 ? Looks ever less with the -1000 becoming the 777 compeitior. Shrink version are dogs, look at how the A318 sold.

From what I can see from Wikipedia ( yes I know, perhaps not the most accurate source ) , it has 79 firm orders

The money to develop the A358 should be spent on improving the A35J. The airlines could upgauge. It is unlikely to be competitive to the 789 which will by 2016 would pose a threat to resale values of the A358. Thus, the banks will have to raise their lease rates to cover losses on the A358s pushing airlines to the A359 anyway. Airbus will have to guarantee the resale value of the A358s, a la the A346s, and that would just be wasted money. Airbus should put the money (engineer salaries) to where it does the most long term good, the A35J.

TN would do best do go small. 788s with 9-across Y with a decent front cabin. But talking new aircraft for TN is a pipe dream. They are so mismanaged, who would loan them the money for new aircraft? And how can TN take the hit on the A340 resale values?

Quoting Viscount724 (Reply 9):
I guess that was their longest nonstop at 5465 nm, 390 nm further than PPT-NRT.

TN should be out of the long route business.

Quoting DDR (Reply 12):
Quoting goldorak (Reply 10):
There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

This is actually a brilliant idea. Would certainly cut the losses for both airlines. Probably too much politics involved to see this happen though.

Its the only way to save the islands economy, but unless the decision is made soon, it will be too late.

Quoting DDR (Reply 12):
Would it also be possible for someone like Air New Zealand to buy a couple of more frames and operate the flights since they are well established in the South pacific?

End of my reply 17.    Either NZ or AF (but not both) would make sense.

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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 6:37 am

It sounds like PPT-NRT is a real loser! It probably needs to go.
How does PPT-LAX-PPT, and LAX-CDG-LAX do?
Even if they were making a small profit, the A340s eat it up just on fuel. So expensive to operate.
There's all this talk about A333s? Why is this? Because they have A340s? So what. The A333 is probably still too large for the markets they serve.
They need an a/c like the 788, that is more in line with the 763ER. They don't need all that capacity.
How much longer will they keep their P cabin (First). That needs to go as well.
J M Y is really all they need. Perhaps not even Y+.
Could there even bea sl ight chance NZ would purchase TN, and merge, or operate them separately ?
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 8:04 am

I'm not sure that survival - as a stand-alone airline - is even possible. Qantas has 46% of Fiji (Air Pacific), but the best model, I think, is Virgin Samoa.

The old Polynesian (stand-alone) was going nowhere fast, so the World Bank set up a deal by which Virgin Blue took a 49% holding and took over all management functions of the airline, and provides one 738 in Virgin Samoa livery, etc. The other 51% is held by Samoan interests (49% to the government, 2% Aggie Grey Hotels).

It is part of the larger Virgin Australia South Pacific (Oz and NZ) network and operation, but for all legal purposes it is a Samoan airline and does what it was set up to do - it brings tourists to Samoa - and it is profitable:

http://www.savalinews.com/2012/02/29/virgin-samoa-takes-off/

“Polynesian Blue – now Virgin Samoa – has recorded successful profits every year. Over US$7 million has been received by government. Tourism growth has jumped from 4 percent to 15 percent, revenues increased from US$83 million to US$113 million and an estimated 2,000 jobs were created as a result of the expansion in the tourism and travel industries. Airfares on average have also dropped by 35 percent."

It flies no long haul, of course, which is presently Air Tahiti Nui's reason for being, but one reason it does so well is because it's overheads have been dramatically reduced. Other Virgin Samoa flights are operated by Virgin Australia and if the (Samoa) aircraft goes tech, Virgin simply brings in another from the mother fleet.

I think it is silly to struggle on with Air Tahiti Nui under this stand-alone structure. A similar deal to Virgin Samoa, with Air France or Air NZ or Qantas or LAN - or Hawaiian - effectively running the airline and incorporating it into its own network would make the most sense to me.

mariner

[Edited 2013-11-23 00:21:16]
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 9:07 am

Quoting laca773 (Reply 19):
How does PPT-LAX-PPT, and LAX-CDG-LAX do?

For TN, they are bleeding money on both sectors
For AF : CDG-LAX is a very successful and profitable route, while LAX-PPT is loosing money for many years now

Also, to consider in the discussion : AF has a cabin crew base in PPT (inherited from UTA) and it comes obviously on the radar when speaking about what needs to be done. It was the same in NOU and when the agreement with SB was signed in 2002/2003, AF CC based in NOU had the choice to move to CDG or to be hired by SB. Likely some people have been laid off also. AFAIK, most CC have chosen to go to SB, but the salaries and benefits were much lower than at AF, but most of them were from New Caledonia so they preferred to stay "at home" (and I understand that knowing the beauty of this place). So to come back to the AF PPT base crew, some of them might be hired by TN if TN becomes the sole operator on LAX-PPT but as TN might have also too many CC...
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 9:43 am

Why do I feel this is the opening credits of a movie we have already seen a few times? Can we fast-forward to the part where the local authorities refuse to implement the cost-cutting plan of their expensive management team because it would mean firing far too many employees who got their position through cronyism or nepotism?

Quoting DDR (Reply 8):
Why do they not just shut down the airline and have AF build a mini base there with 3-4 A330 aircraft to take over the routes?

I doubt the local government is interested. Air Tahiti Nui has been run for many years as a pet project of the local authorities a la mini Air India. They certainly cannot expect Air France to be as compliant and hire whoever they are told to hire irrespective of business needs or professional qualifications.

Quoting lightsaber (Reply 17):
Then TN is doomed. Just shut it down if the airline management isn't allowed to manage the airline with a few mandates from the government.

Why would a government that doesn't have the wisdom to hire a good management team and let them do their work suddenly be wise enough to realize the alternative is to liquidate the carrier?

Quoting mariner (Reply 20):
A similar deal to Virgin Samoa, with Air France or Air NZ or Qantas or LAN - or Hawaiian - effectively running the airline and incorporating it into its own network would make the most sense to me.

I have to wonder though. Did the Samoan government accept the deal immediately or willingly, or did it come about because they needed financial aid from the World Bank and this merger was one of the strings?
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mariner
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 10:48 am

Quoting blueflyer (Reply 22):
I have to wonder though. Did the Samoan government accept the deal immediately or willingly, or did it come about because they needed financial aid from the World Bank and this merger was one of the strings?

I don't know about "immediately" - it took some time to work out, but certainly willingly. The islands don't necessarily want a national airline as such, they want an airline to bring tourists to their islands and they think the major international airlines don't really provide that, or enough of it.

So the Cook Islands (Rarotonga) subsidises Air NZ for RAR-LAX and RAR-SYD to about $12 million a year - which is no small number from the annual budget - but is net positive for the islands in increased tourism. The Cooks had once tried their own airline, but that was more expensive.

In Samoa, Polynesian was a drain on the budget and they wanted a way out of it - but it brought tourists to the islands. So in various discussions with the World Bank, this (fairly creative) deal came about.

http://documents.worldbank.org/curat.../11/11937346/samoa-polynesian-blue

"A joint venture between the government of Samoa and Australia's Virgin Blue, a low-cost carrier, turned an annual United States (U.S.) 7.5 million dollars government subsidy into a U.S. 6.6 million dollars profit in just two years.'

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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 11:35 am

Quoting goldorak (Reply 10):
There is one obvious decision to take, but it seems nobody is ready to take it :
- TN needs to concentrate on LAX-PPT + a few niche routes like PPT-NRT or KIX. They need to stop to fly all the way to CDG
- AF stops the LAX-PPT sector and code-share with TN for LAX-PPT

So, same model as with SB to NOU via KIX and NRT for the CDG service.

This is a horrible solution.

In the case of Air Calin and Noumea, it has delivered them a monopoly which means that they have been able to avoid any sort of attempt to cut costs because they know that passengers either pay their insane fares or have to fly via Australia or Auckland long-haul.

Yes, it reduces losses, and may even deliver small profits.

But it also massively reduces inbound tourism, as well as outbound, because prospective visitors take one look at the monopoly fares and go somewhere else instead.

New Caledonia has lost its Accor hotels and its Parkroyals (Crowne Plazas) and Travelodge. Its inbound tourism is on its knees, even though it is a more beautiful destination than Fiji or Vanuatu next door.
 
Azure
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 12:09 pm

Several scenarios have been evoked in this thread. Some are plausible, some are not. Let's review them :

1. TN shuts down, the French Polynesian authorities stop to subsidize the loss making airline.
Not going to happen in the near future. They have consistently repeated that having a "home airline" is vital for the territory. This strategy is backed by the local industries (hotels and tourism). They are just happy to subsidize an airline with their corporate taxes (there is no income tax in FP). IMHO they have a point here.

2. TN downsizes and axes some routes.
The most likely scenario at short term.
Indeed TN does not need to operate the LAX-CDG route with its own metal, even if it has applied for ATI with the DL/AFKL joint-venture. AF operates 17x weekly flights between LAX and CDG, TN needs only to connect PPT with LAX.
As for NRT, I agree that it might not be the best gateway to Asia (it is not the worst either) but given the tourists profile in French Polynesia (where the Japanese outnumber all the other asian nationalities so far) I do not see the point to switch for another hub. The only question French Polynesia and TN have to answer is : is it worth loosing 5 Million Euros a year to serve NRT from PPT ?...

However this downsizing is risky as it may leave French Polynesia more isolated than ever, at least from the FP government point of view. It could be a necessary step to lower the losses at short term but it does not solve the strategic issue of the islands isolation.

3. TN merges with another carrier
Certainly the most sensible perspective for TN. It probably is an issue that the local authorities are discussing.
We know that stand-alone airlines that are not even part of a global alliance have a limited lifespan in an ever more competitive environment. The question here is : which airline could TN merge with ?

NZ is regarded as a possibility by some members. I agree it would make sense on many aspects but I doubt the French Polynesian authorities are ready to let TN go into foreign hands. It is not sure NZ is ready for this either : it could not own more than 49% of the new entity per EU regulations that apply in French Polynesia.
Is NZ ready to invest a large amount of capital in an airline that it could not own nor fully control and where there is constant political interference ?...

AF is another possibility, less risky politically as it is a French carrier. It could develop a mini-hub in PPT that would solve the employment/overstaffing issue. The extensive AFKL network in latin America (and Asia) could be used to open new routes (or resume routes that used to be served like LIM/PPT/NRT !). The bilaterals are already in place (France/Brazil is open sky for instance). We have already seen that there is lots of potential in connecting Asia and Latin America through the South Pacific.
However there are doubts that AF will continue to serve PPT from LAX after December 2014. It is less than likely it will develop a mini-hub there...

A third possibility that has not been developed on this forum so far is SB. There would be many advantages in merging the two French Airlines of the South Pacific. Their network complements each other very nicely  .
They could develop a dual hub strategy like AF/KL or BA/IB. NOU would serve as a hub to Australasia and PPT to the Americas (North and South), with the two mini-hubs being adequately connected to allow transpacific traffic.

I think this would be the best option for both TN and SB.
 
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yellowtail
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 2:25 pm

Quoting Azure (Reply 5):
LAN 1X weekly flight to SCL through IPC does not really help Tahiti and her islands.

If that is all LA can make work to PPT then there is no way in hell TN would be able to do any better.
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 2:31 pm

AF should pull out of Tahiti and let Air Tahiti Nui serve the route alone. The route is apparently lossmaking for AF, so I don't see why they insist on keeping it, other than for nostalgic reasons.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 3:23 pm

Quoting jfk777 (Reply 13):
They have the same A340 problem every airline has, they use too much fuel. A330 would be the 5 to 10 year solution then 787 would be best, A350-900 are too big.

Many airlines still fly A340s, and even the horrible gas guzzler 744 ! They're not losing millions on every flight, this A340 bashing is really tiring. Give free 787 to TN and they'll still manage to lose money, they'll hire half the island in joy.

As for the hub idea, I don't see it happening. We're not talking about Dubai, PPT is a destination, if you want to go somewhere else you wouldn't think of landing there. It would need massive investment, infrastructure, etc., things that cost money and would probably face a lot of opposition anyway.
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 9:45 pm

Quoting Aesma (Reply 28):
this A340 bashing is really tiring.

Funny. I agree though. I think the A340 is a beautiful lady. She is just getting old and not as efficient as the new young ladies.
 
AM777LR
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 10:42 pm

Why not the 787-8 or 787-9?
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 10:46 pm

Quoting Azure (Reply 25):
It could be a necessary step to lower the losses at short term but it does not solve the strategic issue of the islands isolation.

Call me crazy but PPT is an ideal 788 business case. Not sure if they can capitalize that sort of aircraft. But it burns something like 2/3 the fuel (or less?) to achieve the same business outcome.

That could potentially reduce the isolation of Tahiti.
 
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Mortyman
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 11:09 pm

Will Airbus offer the A350-800 or not ? If so, it should be a good fit for Air Tahiti Nui right ?
 
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mercure1
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sat Nov 23, 2013 11:50 pm

Any TN aircraft acquired will surely be European.

Tahiti can acquire Airbus models tax free, and with French government loan guarantees and incentives.

For example the A340 acquisition was with reported 30% discount and approved by French parliament with 100% government back up loan assurance.

Its all part of broader French overseas territory investment policy.
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lightsaber
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 12:34 am

Azure,

Welcome to my RU list.    Now I'm going to disagree with you.

Quoting Azure (Reply 25):
1. TN shuts down, the French Polynesian authorities stop to subsidize the loss making airline.
Not going to happen in the near future. They have consistently repeated that having a "home airline" is vital for the territory.

But a home airline isn't vital, it is having the seats. A more competitive airline wouldn't employ as many Tahitians, but it would lower the 'external to Tahiti' costs dramatically.

The do nothing scenario is slowly destroying the Tahiti economy. Better to have a better economy of scale using subsidies shared by all interested competitors. In particular for flight to/from Tokyo. There is just too much of a fuel burn difference between the A343 and 788 to make up. Not to mention LN just doesn't have the route structure to utilize their airframes efficiently enough.

Quoting Azure (Reply 25):
TN needs only to connect PPT with LAX.

This we can agree on. CDG is just too costly. Put the butts on an AF A380 or 777.

Quoting Azure (Reply 25):
The only question French Polynesia and TN have to answer is : is it worth loosing 5 Million Euros a year to serve NRT from PPT ?...

I think it would cost far less than 5 million euro per year to subsidize ANA or JL to fly the route with their 787s.

Quoting Azure (Reply 25):
I doubt the French Polynesian authorities are ready to let TN go into foreign hands.

Will they have a choice? The current course is not viable long term. When will the money losses end?

Quoting Azure (Reply 25):
A third possibility that has not been developed on this forum so far is SB. There would be many advantages in merging the two French Airlines of the South Pacific. Their network complements each other very nicely
Quoting Azure (Reply 25):
However there are doubts that AF will continue to serve PPT from LAX after December 2014. It is less than likely it will develop a mini-hub there...

That is part of the problem. Since TN is subsidized, AF will have issues competing. Without TN, I think AF could set up a PPT hub.

Quoting AM777LR (Reply 30):
Call me crazy but PPT is an ideal 788 business case. Not sure if they can capitalize that sort of aircraft.

Agreed on both counts.

Quoting Aesma (Reply 28):
Many airlines still fly A340s, and even the horrible gas guzzler 744 ! They're not losing millions on every flight

Then why are so many airlines getting rid of both types? EK, LH, VS, QF, SQ, LA, and others have all placed orders or have RFQs to replace their 744s and A340s. That is now with very few 787s in service and zero A350s. What is TN going to do in 4 years when between the two types we're talking over 750 787s and A350s are flying. TN standing still will get creamed. We're talking a difference of over 20% in cost to carry each passenger.

At the minimum buy used 77Es that should become quite available over the next few years. But can LAX-CDG so its fewer airframes.

Quoting mercure1 (Reply 33):
For example the A340 acquisition was with reported 30% discount and approved by French parliament with 100% government back up loan assurance.

Excellent. TN needs to default and start returning the surplus A340s.

Quoting Aesma (Reply 28):
As for the hub idea, I don't see it happening. We're not talking about Dubai, PPT is a destination, if you want to go somewhere else you wouldn't think of landing there. It would need massive investment, infrastructure, etc., things that cost money and would probably face a lot of opposition anyway.

Use the money that is being thrown away subsidizing TN. Long term, TN either hubs some to help manage demand variability, or they will be pushed out of the market by the hubbing airlines.

PPT will have to be surved by widebodies except Hawaii, New Zealand, and nearby islands. I just did range circles from PPT and I see no viable way to service the island with a narrowbody to major markets.

http://www.gcmap.com/mapui?R=3000nm%40ppt,+3500nm%40ppt

Quoting DDR (Reply 29):
Funny. I agree though. I think the A340 is a beautiful lady. She is just getting old and not as efficient as the new young ladies.

Beauty?    But her time has come. This comparison will only become more brutal once more 787s enter the fleet and they compete off a depreciated value...

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B-HOP
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 2:25 am

What about merging with ZI, they are about to fly to Beijing and could use that and HU's hub, I don't know whether they have transit visa in China though. They should really just keep LAX/NRT/maybe HKG/BJS and should just pay VB to do AKL/SYD, or their own 319 to do it, a waste to put a 343 on a short route. Doing LAX to CDG few days a week is just suicidal.

For fleet, maybe a few 332 would have done the job for now,for the next few years, 788/350 would be too expensive for them.

Tahiti needs to promotes itself outside US/AUS/and France, nobody knows much about them in other countries in Pacific Rim, they could be the next Mauritius if they choose to.
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goldorak
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 9:46 am

Quoting Azure (Reply 25):
A third possibility that has not been developed on this forum so far is SB. There would be many advantages in merging the two French Airlines of the South Pacific. Their network complements each other very nicely  .
They could develop a dual hub strategy like AF/KL or BA/IB. NOU would serve as a hub to Australasia and PPT to the Americas (North and South), with the two mini-hubs being adequately connected to allow transpacific traffic.

I think this would be the best option for both TN and SB.

Azure, this is a brilliant idea that didn't even cross my mind ! Long-term viability of SB is also questionable but is certainly better managed than TN and do not have the same "folie des grandeurs" behavior. A single unified South Pacific French airline would make a lot of sense to link the French islands (New Caledonia, Polynesia, Wallis et Futuna, etc) to neighboring countries and main markets like USA (LAX), Japan without forgetting China + connection to metropolitan France via AF in NRT/KIX/LAX.

Quoting Azure (Reply 25):
AF is another possibility, less risky politically as it is a French carrier. It could develop a mini-hub in PPT that would solve the employment/overstaffing issue. The extensive AFKL network in latin America (and Asia) could be used to open new routes (or resume routes that used to be served like LIM/PPT/NRT !). The bilaterals are already in place (France/Brazil is open sky for instance). We have already seen that there is lots of potential in connecting Asia and Latin America through the South Pacific.
However there are doubts that AF will continue to serve PPT from LAX after December 2014. It is less than likely it will develop a mini-hub there...
Quoting lightsaber (Reply 34):
That is part of the problem. Since TN is subsidized, AF will have issues competing. Without TN, I think AF could set up a PPT hub.

Never say never, but IMO AF will never establish a hub or mini-hub in PPT. Way too costly and complicated.

Quoting koruman (Reply 24):
This is a horrible solution.

In the case of Air Calin and Noumea, it has delivered them a monopoly which means that they have been able to avoid any sort of attempt to cut costs because they know that passengers either pay their insane fares or have to fly via Australia or Auckland long-haul.

Yes, it reduces losses, and may even deliver small profits.

But it also massively reduces inbound tourism, as well as outbound, because prospective visitors take one look at the monopoly fares and go somewhere else instead.

New Caledonia has lost its Accor hotels and its Parkroyals (Crowne Plazas) and Travelodge. Its inbound tourism is on its knees, even though it is a more beautiful destination than Fiji or Vanuatu next door.

What you say is true and full of good sense. However, we have also to understand that these markets are tiny (not entitled to mass tourism) and those islands are in the middle of nowhere and far from everywhere (if we except NC to Oz and NZ), and so it cost a lot to fly there. Especially for small airlines like TN and SB who have high fix costs and small-scale operations to absorb them.
If there was a real need and market, other airlines would fly there, particularly a Japanese carrier from Japan and a US carrier to PPT. But it is much more suitable for them to code-share with SB, AF and TN.
 
finnishway
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 10:00 am

B787 would be the best solution and it would especially cut their fuel costs very much, but there is just one problem. Where to get one? If they order it now they will have to wait for years. I guess that present operators are not going to lease one unless you pay well.

Would B757 be able to fly PPT-LAX? It could be cheaper to operate than A340.

A330 is the second best alternative after B787. I TN should focus flying to NRT, LAX and other islands in the Pacific. Just cut the route to Paris.
 
AirGAbon
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 11:05 am

My ideas:

TN should operate A320, with a GF "cabin style (in particular in J)" on:
daily PPT-RAR-AKL code-share with NZ
daily PPT-NAN-SYD code-share with QF
1 weekly PPT-WLS-NOU code-share with SB
2 weekly PPT-IPC code-share with LA

And continue to operate widebodies to:
LAX twice daily (connection with AF A380 LAX-CDG)
NRT three weekly
open YVR three weekly
open GUM-PVG (GUM, technical stop) two weekly
open GRU code-share with JJ, daily
open EZE, four weekly
open HNL c/s HA, weekly

Adapt the schedule to connect Latin-America & North America with Australia/NZ/China/Japan.

And open a dedicated separate business class lounge outside the terminal (QR style).
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Sun Nov 24, 2013 11:18 am

Quoting goldorak (Reply 36):
What you say is true and full of good sense. However, we have also to understand that these markets are tiny (not entitled to mass tourism) and those islands are in the middle of nowhere and far from everywhere (if we except NC to Oz and NZ), and so it cost a lot to fly there. Especially for small airlines like TN and SB who have high fix costs and small-scale operations to absorb them.
If there was a real need and market, other airlines would fly there, particularly a Japanese carrier from Japan and a US carrier to PPT. But it is much more suitable for them to code-share with SB, AF and TN.

You are losing sight of what is the chicken and what is the egg.

Air Tahiti was created as a tool to ensure ongoing inbound tourism into French Polynesia, to fill Moorea and Bora Bora's luxury hotels and bring in foreign currency.

But most of the "solutions" are ways of reducing the airline's losses, but would have the by-product of massively reducing competition, and would therefore inflate fares and reduce the number of inbound visitors.

Mariner is actually right about what should have happened in the first place. The French Polynesian government should have put the LAX, NRT and SYD routes out to tender, with arrangements to underwrite any losses.

But that ship has sailed, largely because successive Flosse governments have valued TN as a reward for services rendered, a patronage device. Gaston Flosse is the man for whom Air Tahiti Nui's First Class cabin (row) existed. And with him back in control of the country, Air Tahiti Nui returns to operating in that political environment we know so well.
 
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Mon Nov 25, 2013 11:43 am

Quoting lightsaber (Reply 34):
Welcome to my RU list.    Now I'm going to disagree with you.

Thank you, and welcome to mine as well !
This is a great debate, I appreciate we can disagree on some points ! But we agree on the global picture.



Quoting lightsaber (Reply 34):
a home airline isn't vital, it is having the seats.

This is the key point, and I tend to agree on both counts. There is a "but" though : this liberal approach works well in large and mature markets, and not so well in the smaller ones.
Let me digress and give a couple of examples : should AZ disappear, the void in Italy would be quickly filled by the LCCs for the short-haul and by other foreign airlines for the long-haul, not to mention the possibility of a start-up, Italy-based airline. However in a smaller market like Hungary, 2 years after the demise of Malev, BUD has recouped only 35% or so of its former traffic so far...
Should TN disappear, the situation would be even more critical in French Polynesia. The market size, the high cost of labor and commodities, the strict regulations and laws combined with the geographic isolation make it a not so desirable market for a new entrant.
Therefore the question is : how could the French Polynesian government secure these seats to some "vital" destinations ?...



Quoting lightsaber (Reply 34):
I think it would cost far less than 5 million euro per year to subsidize ANA or JL to fly the route with their 787s.

It would probably cost less but I am not sure about the "far less". In fact, this would need some calculations.
If we believe the subsidy could be in the vicinity of € 30,000 / flight, on the basis of 2x weekly ops, it would amount up to € 3,120,000 per annum which is still less than the estimated € 5 Mi loss.
But we have to take into consideration the loss of social taxes and the unemployment costs that would add up if TN axes the route.
I am not even sure a € 30,000 subsidy per flight would be sufficient to convince JL or NH that have shown no interest so far for the destination.
However AF could be interested. It has already a crew base in PPT. Interestingly it would become again a true round the world airline (CDG-NRT-PPT-LAX-CDG) !   .



Quoting lightsaber (Reply 34):
Without TN, I think AF could set up a PPT hub.

Agreed.
Although as Goldorak rightfully noted the distance from AFKL main hubs and the costs of the operation might be an handicap. However UTA managed to have an extensive network in the South Pacific, so it is certainly feasible.
The bottom line remains that AFKL has other priorities for its future growth than the South Pacific (Africa comes first to mind).



Quoting B-HOP (Reply 35):
What about merging with ZI, they are about to fly to Beijing

Interesting idea ! It is true ZI and its Chinese shareholder have an ambitious plan for the next 5 years. I find the prospect of a ZI/TN merger (or partnership to start) quite exciting as the potential of China for Tahiti is huge, certainly !
Your question raises another one : the secondary French airlines need to consolidate. How this will be achieved ? I do not have the answer, but we might see some interesting developments !



Quoting AirGabon (Reply 38):
And continue to operate widebodies to:
LAX twice daily (connection with AF A380 LAX-CDG)
NRT three weekly
open YVR three weekly
open GUM-PVG (GUM, technical stop) two weekly
open GRU code-share with JJ, daily
open EZE, four weekly
open HNL c/s HA, weekly

I find this part of your comment a little bit too ambitious, at least at short term...
I am not sure there is a market at YVR. May be SEA (DL is growing there, and already codeshares with AFKL on LAX-PPT IIRC)



Quoting koruman (Reply 39):
Gaston Flosse is the man for whom Air Tahiti Nui's First Class cabin (row) existed. And with him back in control of the country, Air Tahiti Nui returns to operating in that political environment we know so well.

Sadly true. But the times have changed, the finances are tighter, and we can hope he has learnt his lessons...
 
migair54
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Mon Nov 25, 2013 12:41 pm

I read domewhere that some early frames are available because the operators doesn't want them, and I heard the Rwandair is very interested in them, amybe TN can grab a couple of them and get rid of the A-340, otherwise they can lease some B767 or A330 while they wait for new planes.

Quoting AirGabon (Reply 38):
open GUM-PVG (GUM, technical stop) two weekly
open GRU code-share with JJ, daily
open EZE, four weekly

I dont see any future to that routes.
 
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lightsaber
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Mon Nov 25, 2013 2:21 pm

How bad is Tokyo losing money today? I found a link suggesting Japanese tourists are returning.

http://tahitinews.co/english/tourism...-stable-during-the-first-semester/

Quoting mariner (Reply 20):
I'm not sure that survival - as a stand-alone airline - is even possible. Qantas has 46% of Fiji (Air Pacific), but the best model, I think, is Virgin Samoa.

After reading your analysis, I agree. VA would be brilliant. Short haul aircraft to provide feel and a small number of long haul aircraft that are part of a larger sub-fleet.

Quoting blueflyer (Reply 22):
Why would a government that doesn't have the wisdom to hire a good management team and let them do their work suddenly be wise enough to realize the alternative is to liquidate the carrier?

I think they'll have no choice and that would devastate the Tahiti economy if the transition is not planned in advance.

Quoting Azure (Reply 40):
However in a smaller market like Hungary, 2 years after the demise of Malev, BUD has recouped only 35% or so of its former traffic so far...

Which is why the Tahiti government must start planning the transition now. Allow VA or NZ to operate a la Virgin Samoa and bring in the tourists.

Quoting Azure (Reply 40):
But we have to take into consideration the loss of social taxes and the unemployment costs that would add up if TN axes the route.

Those losses are far less than the cost to subsidize TN. The costs of TN are too much and will bring down the greater Tahitian economy unless something is done. I'm simply unable to find a model that will grow Tahitian tourism keeping TN afloat.

Bag it. Have VA/NZ/or AF fly to SYD, AKL, and LAX. Form a partnership for Tokyo. Allow foreign some pretty generous rights to jump start back open the closed hotels and provide their own charter air service as they see fit.



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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Mon Nov 25, 2013 10:51 pm

Quoting lightsaber (Reply 34):
I think it would cost far less than 5 million euro per year to subsidize ANA or JL to fly the route with their 787s.

With the added advantage that people from most of the countries TN serves prefer flying the national carriers from their own countries rather than TN. Japan,Korea,USA, even NZL to an extent. Of course Tahitians fly TN, but I certainly think that like Cook Islands do, the best option is to subsidise several tactical carriers to bring traffic.

Of course the fact that Tahiti is an isolated,expensive location to visit doesn't help. They could help themselves no end by trying to offer a few more options within the same budget as their rival destinations rather than trying to maintain such a high end that doesn't actually seem so interested in Tahiti any more. That is the real reason more people don't visit and TN has difficulty (even before the inept,corrupt management)

Also it costs 17,000USD per visa infringement to the airline. That doesn't help when weighing up whether it's a marginal route or not.
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lightsaber
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 3:31 am

Quoting koruman (Reply 39):
Air Tahiti was created as a tool to ensure ongoing inbound tourism into French Polynesia, to fill Moorea and Bora Bora's luxury hotels and bring in foreign currency.

But most of the "solutions" are ways of reducing the airline's losses, but would have the by-product of massively reducing competition, and would therefore inflate fares and reduce the number of inbound visitors.

Great in theory, but by driving out competition it has put a hole in the Tahiti economy.

Quoting koruman (Reply 39):
Mariner is actually right about what should have happened in the first place. The French Polynesian government should have put the LAX, NRT and SYD routes out to tender, with arrangements to underwrite any losses.

   Still not too late. That could save the Tahiti economy.

Quoting Azure (Reply 40):
t would probably cost less but I am not sure about the "far less". In fact, this would need some calculations.
If we believe the subsidy could be in the vicinity of € 30,000 / flight, on the basis of 2x weekly ops, it would amount up to € 3,120,000 per annum which is still less than the estimated € 5 Mi loss.

Add in a partner seeking to profit off the run and tie in with Japanese and hopefully other Asian tourist sales groups... I think enough added revenue could be brought in to eliminate the subsidy after a few years. Subsidized entities become managed to expand the subsidy. TN is unfortunately become that (patronage and other schemes).

Quoting Azure (Reply 40):
But the times have changed, the finances are tighter, and we can hope he has learnt his lessons...

This sounds like it will end badly...

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opethfan
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RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 6:21 am

I'm by no means an expert on TN's situation, but here are my observations:

1) TN cannot survive on its own. Either as a (fancy) tourist destination or as French Polynesia's link to the world, they need airline partners to connect to networks beyond the small number of routes TN can serve themselves. But, of course, airlines can be cliquey and petty, so even if TN don't play any kind of alliance game, they still need to think about who to partner with and whose networks to feed into.

2) PPT is a long way away from anywhere. The only 2 major routes within narrowbody range are HNL and AKL. Depending on load factors, perhaps a couple of A320s could be viable on these routes rather than fly big heavies. Could some older 757s be viable for the increased range to SYD or LAX?

3) If TN do start shacking up with NZ, they may also want to think about adding service to SFO to add onto UA's base there.
 
zkncj
Posts: 3428
Joined: Wed Nov 09, 2005 4:57 pm

RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 6:51 am

Quoting AirGabon (Reply 38):
TN should operate A320, with a GF "cabin style (in particular in J)" on:
daily PPT-RAR-AKL code-share with NZ
daily PPT-NAN-SYD code-share with QF

Don't think there is anyone that NZ would allow them to touch RAR-AKL and if they did they would learn the hard way, NZ will put allot of money into keep someone out of there playground. They run AKL-RAR-AKL about 14x weekly at a very nice profit.

Would there be enough people for a daily A320 to SYD/AKL? SYD current has no direct service (yet it has a weekly 763 to RAR) and AKL struggles at 4x weekly.

Allot of the market ex-AKL is the cheap I want a couple day break with a 2-4hour flight, hence NZ's all Y Buy on Board model on these sectors.
 
ZK-NBT
Posts: 7161
Joined: Mon Oct 16, 2000 5:42 pm

RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 7:37 am

Quoting zkncj (Reply 46):
Don't think there is anyone that NZ would allow them to touch RAR-AKL and if they did they would learn the hard way,

VA have been doing it for several years now, up to 5 weekly now, started at 2 weekly.

Quoting zkncj (Reply 46):
Would there be enough people for a daily A320 to SYD/AKL? SYD current has no direct service (yet it has a weekly 763 to RAR) and AKL struggles at 4x weekly.

Between NZ and TN maybe a daily A320 would work, NZ use a 763 due to lack of alternatives though, otherwise they would use an A320.

I think i'm on the side of closing TN down and getting other carriers to run international services, probably NZ back on LAX-PPT with maybe AF doing NRT-PPT.
 
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aerorobnz
Posts: 8336
Joined: Sat Feb 10, 2001 3:43 pm

RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 7:50 am

Quoting ZK-NBT (Reply 47):
VA have been doing it for several years now, up to 5 weekly now, started at 2 weekly.

VA are a close partner. for every cent gain on the shares they hold it could dwarf any profit VA may make on RAR routes...What's good for VA is good for NZ when all said and done.
Flown to 147 Airports in 62 Countries on 83 Operators and counting. Wanderlust is like Syphilis, once you have the itch it's too late for treatment.
 
koruman
Posts: 2179
Joined: Mon Feb 06, 2006 9:08 pm

RE: Air Tahiti Nui Seeks Reforms; Maybe Smaller Planes

Tue Nov 26, 2013 10:00 am

Quoting ZK-NBT (Reply 47):
I think i'm on the side of closing TN down and getting other carriers to run international services, probably NZ back on LAX-PPT with maybe AF doing NRT-PPT.

Much the best option, because it provides competition to Paris in the shape of:

PPT-NRT-CDG (AF)
PPT-LAX-LHR-CDG (NZ)

That prevents the Air Calin inbound tourism armageddon scenario. NZ1/2 used to carry significant numbers of passengers between Paris and Papeete via London.

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