Prime Minister, Tuilaepa Dr. Sa’ilele Malielegaoi, has turned on critics of government-owned Samoa Airways who have continued to question the performance of the airline, calling them “stupid.”
He was particularly scathing of the Editor of the Samoa Observer over the Sunday Samoan’s front page story titled “Samoa Airways $2m teething problems.”
“In the real world, a loss made in the first two months may be offset in months three; four and five,” Tuilaepa told the Samoa Observer during an interview in his office yesterday. “It can be a loss again in months six, seven and eight and that can be money earned in nine, ten, eleven and twelve, which will offset the negative results in the earlier months of a business.
“What goes in the airline business is true in any kind of business, the Samoa Observer, Time Magazine or in Playboy. And it is not uncommon that a loss made in some months may be offset in later months.”
Tuilaepa reminded that Samoa Airways is still a baby. He said critics who say the airline is already running at a loss are "stupid."
“This great airline of Samoa has only started in four months and the Samoa Observer writes a stupid headline based on ignorance,” he said, adding that the Airline is going through the same phase the “stupid editor” went through when “he was a baby.”
“When he was just born, he rolled on his stomach, after sucking his big toes, the same toes that began to grow later, then he walked and then run.”
Tuilaepa reiterated that a loss or profit can never be determined after the first five months of operation.
“An ordinary person who does not understand the technicality surrounding businesses can easily make a stupid mistake on the basis of an equally stupid report that the company is broke and therefore it should wind up.”
He said people calling on the Government to be transparent with the Airline’s current financial situation are also “stupid.”
“Have you ever seen a business report in five and half months?
"They don’t do that because it is not a business practice. And it is not a reliable basis upon which a tax payment to Government is based. There is no tax payment on income earned in a five months period or a six months period or in a seven months period. That is not in accordance with the law.”
The same principle applies all over the world, Tuilaepa said.
“And so is Samoa and the great Airline called the Samoa Airways. Now all businesses, wherever it is established, follow the same practice.
“Every big business is set up with the assumption that it will continue to exist forever. It is a universal convention for all business to follow, it is assumed to have a continuous life to eternity and the most accurate picture of its operation, whether it is a loss or profit, can only be determined at the end of its life.
“The only business that its profit can be accurately determined is a one-day business. One that is an ice cream bar that is put up during Flag Day or a chopsuey stall. That is the only kind of business you can determine to the final cent the accuracy of the profit making. Because it is the only business where you can total up the actual revenue, minus the actual expenditure equals the actual profit.”
That said, the Prime Minister said a profit or loss for the Airline will not be known until the end.
“The airline will not elaborate until we get the final picture. The month to month returns are needed by the management to ensure what needs to be addressed, and that includes issues such as the cost.”
Tuilaepa also turned his attention to a Cabinet Minister and government sources who claimed the monthly losses are accumulating and have reached more than $2million.
“It’s an indication of how stupid that person is. Those issues are internal and for management only,” he said. “It does not cast a good reflection on an airline that we all need to support.”
He explained that with every business, there are targets and that’s why the Government wants monthly reports about the performance of the Airline. He said the same principle is used by big companies in Samoa including Frankie’s, AH Liki Wholesale and global airlines like Hawaiian Airlines, Fiji Airways, Emirates, American Airlines and more.
“Do you find these companies issuing audited financial statements after five months of operation? Never. But they do provide internal reports of earnings and expenditures on a month basis only for management purposes. Yes but never for publication. Why? Because all these are estimates to help the management.”
Prime Minister Tuilaepa wouldn’t say whether Samoa Airways is meeting its monthly targets.
In the meantime, he said he is saddened by members of the business community who continue to “nag” and “gossip” about the state of the airline. He wouldn’t say who they are.
“These are the people who should show strong support, most especially those in the tourism sector,” Tuilaepa said. “Just like overseas people living in New Zealand, they have been complaining about it, yet they don’t utilise our airline. When they talk it’s as if the moon will fall from the heavens, yet they show no support.”
The Prime Minister also revisited the issue of Virgin Samoa.
“One of the biggest downfalls in the joint venture with Virgin Australia is that instead of low airfares that we agreed to in the first place, the airline charged extremely high airfares, that our people could not afford. On top of that they cut down the flights, to make the exorbitant fees convincing.
“The moment we announced that we would resume our airlines suddenly out of the blues, they said they would increase flights because they just discovered there are a lot of tourists that wanted to fly to Samoa.
“This is a typical lie, imposed by a major international airlines to our smaller country in order to make profits out of our sweat.”
Tuilaepa said “all major international airlines do exactly the same.”
“Unfortunately, when we tried to draw the attention of their government to this blatant practice, they hide behind the Laissez-faire.
“The Government quotes to me the Laissez-faire doctrine, which means they do not interfere with the work of their Government, businesses which operates completely on commercial principles. But we are dealing with real people.”
Tuilaepa said Samoan people are very happy now.
“Since we put up our airline, the reality since is that we now have affordable airfares for our people; which would never have happened if we did not fly our Samoa Airways.”
Lastly, he delved into “Polynesian Airlines” and why the Government did not keep the name.
“Polynesian can refer to any country,” he said. “It may be referred to as Tokelau or Easter Island, which is why we threw away that useless label that has no identity. We put in Samoa Airways there to reflect that this beautiful airline is owned by us, Samoans, not some vague label that might be taken as owned by the Lau Group of Fiji.”
The Prime Minister again turned on the Samoa Observer. Referring to the front page of the Sunday Samoan, he said he hopes this “is the last nonsense I read” from “this great newspaper” he went on to accuse of confusing readers.
“Lastly I love you all fa’alausoso’o (continuously),” he laughed.