Concern over Fiji airline cartel
A FijiLive report says that the code-sharing partnership between Air Pacific and Air New Zealand on the Los Angeles/Nadi route has been described as a cartel and not in the best interest of Fiji.
Speaking at the Fiji Employer’s Federation combined council meeting yesterday, Tourism and Transportation Council chairperson Jim Sherlock says the “cartel” formed by Air Pacific and Air New Zealand is a concern for tourism.
Sherlock says the two airlines are members of different alliances, but they are now code-sharing on the Los Angeles / Nadi route to provide a daily service on that route.
“While this action has been taken to rationalise the service and their loadings are quite full, it is not in the best interest of Fiji to have no competition since Los Angeles is the gateway for North America and many European tourists.”
He further highlighted the decline in tourism which commenced in November 2005 with the Qarase Government “introducing, without consultation” with the industry, a ‘bed tax’ to commence in January 2006.
“This led to the travel wholesalers in our major markets not issuing marketing brochures on Fiji due to the uncertainty as to who was to pay for this new tax.
“The industry ended up with a user pays 3 per cent “Hotel Turnover Tax” which commenced in June 2006 making Fiji just that much dearer to holiday in.”
He says the December 2006 coup had its usual effect making Fiji perceived as a dangerous destination and it was only through the promotions of Fiji Islands Visitors Bureau (FVB) and the private sector Tourism Action Group (TAG) that Fiji managed to retain some of its major markets.
Sherlock says while the Interim Government chose to slash tourism funding to keep their cost down initially, however it did contribute some of the FVB money for the TAG promotion which helped with the Australasian market.
He says occupancy figures for the hospitality industry this year is down 45 per cent on that of 2006 which was already down from the 2005 year.
The drop in visitor numbers coupled with the 30 to 40 per cent drop in room rates mean the industry is not even holding its own financially, he says.
“Perhaps the worst aspect of all this is that our Minister of Finance (Mahendra Chaudhry) does not realise just how precarious the financial viability of many of our tourist operators are right now.
“While many of the major resorts are owned by offshore corporations, the vast majority of operators are local companies employing local staff and trying to use local produce where possible.”
Sherlock says this downward spiral can be halted by the minister honouring the commitment made to the tourism industry to fund $2 million for promoting Fiji as a safe and friendly destination.
Report by The Mole
John Alwyn-Jones
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