Govt. says Samoa Airways will weather short-term storm
Samoa Airways is experiencing a “tough time” but the Government is optimistic its fortunes will change once it overcomes short-term obstacles, the Chairman of the committee overseeing the airline's finances says.
A recent annual report from the Ministry for Public Enterprises showed the airline ran at an operating loss of $21 million last Financial Year.
And yesterday the former General Manager of the airline's predecessor, Polynesian Airlines, Papalii Grant Percival, said the national carrier had been dealt several significant blows that threatened its future survival.
Emails to the Minister of Public Enterprises, Lautafi Selafi Purcell, and the C.E.O. of Samoa Airways, Seiuli Alvin Tuala, about the airline’s future financial performance were not responded to as of press time.
But the head of the Ministry of Finance, Leasiosiofaasisina Oscar Malielegaoi, who also sits on the Committee overseeing the state-owned airline's finances told the Samoa Observer that the airline's financial woes were temporary.
Last Financial Year’s decline came despite a substantial increase to the airline's revenues, which rose to $93 million from $48 million; expenses amounted to $114 million.
Samoa Airways is also behind on its Government dividend payments to the tune of more than $10 million.
Last week, the Samoa Government in a Cabinet directive endorsed a move by the Government to close the Apia-Nadi flight route, as it moves to promote the use of Samoa Airways for passengers travelling between Samoa and Fiji.
But Leasiosio said the airline's expenditure included investments in key personnel, which, he said, were helping to drive a turnaround in its performance.
“That was demonstrated with the high growth from the tourism sector, then came the measles; we are in a very tough time, but we’re optimistic after the measles and coronavirus then we will see growth gradually picking up again," Leasiosio said.
Asked whether the Government would offer the airline further financial assistance, Leasiosio explained the airline's guarantor is the Unit Trust of Samoa (U.T.O.S.) which provided financing for the airline.
Samoa Airways took out a $12 million loan from the Trust in 2018.
“As I mentioned there was a turnaround, we were confident that Samoa Airways can financially sustain their operations and we are optimistic the airline will succeed," said Leasiosio.
“We cannot afford to close down the airline.
“We will be at the mercy of other airlines and airfares overnight will go back up to $4,000 tala; and during the holidays, airfares were as low as $800 tala; and we haven’t seen that for some time and we do now because of Samoa Airways."