Business: AIR WARS OVER THE CORAL SEA

And the winners are? The customersNina Ratulele Don’t write off Solomon Airlines. That was the message in the Solomon Islands capital, Honiara, as the national airline prepared to battle for its busiest international route.As this month began airline wars were breaking out, and bringing good news for passengers. Brisbane-Honiara-Brisbane over the Coral Sea was becoming the most competitive island route in the South Pacific. The fast-growing Brisbane-based SkyAirWorld was preparing to launch five flights a week on it from March 3 using modern Embraer 170 and 190 regional jets. Nauru’s Our Airline was flying the route twice weekly using its Boeing 737-300. And Solomon Airlines was maintaining its four flights a week, using a mix of Boeing 737-800 and Boeing 737-200 planes. It was planning to replace the 737-200 flights with 737-300 services. As the air wars intensified, people flying were the definite beneficiaries. SkyAirWorld got all the early publicity with the announcement of its plans. Solomon Islands tourism operators welcomed its innovative ideas and new services. Many people welcomed its low-cost fares and modern jets. But at Solomon Airlines headquarters in central Honiara, chief executive Ron Sumsum and his management team had their own plans. This included highlighting they had more seats and space on the route, cheaper fares and service by friendly local cabin crew. As this ISLANDS BUSINESS edition went to press, it appeared Solomon Airlines would replace the Boeing 737-200 flights with bigger 130-seat Boeing 737-300 flights from next month. These would be flown for it by Australia’s OzJet with Solomon Airlines cabin crew aboard. Melbourne-based OzJet currently operates three of Solomon Airlines’ Brisbane-Honiara-Brisbane flights a week using all-Australian crews. It uses the smaller and older Boeing 737-200s for this. The fourth flight is now operated for Solomon Airlines by Sumsum’s former airline, Air Vanuatu, using its flash new 185-seat Boeing 737-800. Sumsum is the most senior ni-Vanuatu jet captain and a former operations manager and acting chief executive of Air Vanuatu. The Brisbane route has been an important revenue earner for government-owned Solomon Airlines. Passengers travelling on it include the many Australians going to and from Honiara because of the presence of the Australian-led Regional Assistance Mission to Solomon Islands (RAMSI). Meanwhile, tourism is growing again amidst the stability brought by RAMSI. And there are strong local connections because of the big Solomon Islander population in Australia. Brisbane is also the country’s nearest connection to other international flights. So there is plenty of business at stake and both SkyAirWorld and Solomon Airlines launched major advertising campaigns. Both ran full page colour ads in the daily Solomon Star newspaper. The competition also had an added edge. Solomon Airlines and SkyAirWorld had last year launched what turned out to be a short-lived partnership. SkyAirWorld’s brand-new 76-seat Embraer 170 was painted in Solomon Airlines colours. It was leased to fly Solomon Airlines services linking Honiara with Brisbane, Santo (Vanuatu) and Nadi (Fiji). But the agreement soon collapsed amidst allegations and counter allegations. SkyAirWorld abruptly grounded the plane in Brisbane. It said Solomon Airlines was not meeting lease payments. At Solomon Airlines they said the E170 was not providing the capacity they had expected and revenue was reduced. The heavy fuel load the smallish jet had to carry restricted passenger and cargo loads. Reports of flights arriving without the bags of passengers were common. This was because of a third factor. Honiara International Airport has only limited navigational facilities and no air traffic control. Planes flying there have to load up with extra fuel in case poor weather around the airport prevents them landing. There is no other alternative international airport in the Solomons. The nearest are in Vanuatu and Papua New Guinea. The collapse of the SkyAirWorld deal briefly grounded all Solomon Airlines international services. A surrounding financial crisis led to predictions by some that the airline would collapse. Power struggles between a powerful new board and airline management plus political interference didn’t help the airline’s public image. But despite all this, Sumsum and his management team flew the airline internationally and domestically. Solomon Airlines quickly brought in OzJet planes to maintain the Brisbane service. It developed code-share flights on other routes with Air Niugini and Air Vanuatu. By the end of the year, it had actually expanded international services again through code-sharing on other airlines’ planes. This included a weekly Sydney service code-shared with Air Vanuatu, and three Nadi flights a week code sharing with Air Niugini and Fiji’s Air Pacific. Questions have been raised in government and board circles over whether Solomon Airlines now needs to continue international services of its own. However, there is also a public realisation of the importance of the airline to the country. A recent editorial in the Solomon Star highlighted the airline’s role in providing both international connections and local domestic services. It also pointed out that in times of trouble when some other airlines did not want to know the Solomons, Solomon Airlines kept the country connected. “Let’s not imagine a world without Solomon Airlines,” it said. The coming months will be crucial for Sumsum and his management team. Their relationship with the government-appointed board of directors will be watched closely by those interested in the airline’s future.

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