Getting an aircraft during COVID-19 lacks rational
You only have to speak to non-government organisations such as the Samoa Victim Support Group (SVSG), to get insights on how the coronavirus (COVID-19) global pandemic is already impacting hundreds of families, even without the country registering a positive case of the virus to date.
COVID-19 has single handedly decimated our tourism industry, which at its peak in 2018 grew by 16.4 per cent and generated earnings of T$493.8 million. At that time this was an increase of T$69.4 million when compared to the same period in 2017.
Remittances in 2017-2018 was the country’s highest foreign exchange earner, recording approximately T$503.73 million, according to Central Bank of Samoa (CBS) figures released at that time.
Sadly, those gains in Samoa’s tourism sector have been lost and consigned to history, due to the measles epidemic in mid-2019 to early 2020 that claimed over 80 lives, and the COVID-19 global pandemic that followed.
Data released last month by the CBS, Samoa Bureau of Statistics and the Ministry of Revenue through their “Visitor Earnings and Remittances Report March 2020” show visitor numbers down by 62.7 per cent.
The vulnerability of our island’s economy to global economic pressures and its reliance on tourism and remittances would always come back to haunt us one day. We are now living through it with hundreds of families affected.
And it will only get worse, if projections by the CBS last month are any indication. The CBS has forecast that Samoa’s gross domestic product (GDP) will contract by –6.6 per cent at the end of 2020, following the closure of the international border.
A report released by the International Civil Aviation Organisation (ICAO) early this month estimated an overall reduction of international passengers ranging from 44 per cent to 80 per cent in 2020 compared to 2019.
Looking at the estimates provided by the ICOA of the billions of dollars in losses incurred by the global aviation sector due to COVID-19, it is a safe bet that our tourism industry is a long way off from getting back to those glory days.
Therefore, what is the Government’s plan to get our economy back on its feet and to reinvigorate and boost the various sectors as part of its post-COVID-19 economic recovery plan?
Leasing or purchasing a new plane for the cash-strapped national airline Samoa Airways – as announced by Prime Minister Tuilaepa Dr. Sa'ilele Malielegaoi last Friday in his media programme – will only add to the Government’s increasing expenditure as global tourism has literally grinded to a halt.
The decision by the Government to lease or even purchase an aircraft in these economically challenging times is beyond belief, especially when most countries around the world have closed their international borders, consequently spelling the end of the travel industry and global tourism in general.
Sadly, any developments relating to the operations of Samoa Airways have become a closely guarded secret. Last Thursday the Minister for Commerce, Industry and Labour, Lautafi Fio Purcell, told Samoa Observer he had “no idea” about plans by the airline to get an aircraft.
Twenty-four hours later the Prime Minister announced that the Samoa Airways plane is expected to arrive in Samoa next month.
For the sake of the tax-payers of this country, who continue to pay the Government’s bills, the Prime Minister and the Minister should enlighten the people on how a new aircraft will add value to their lives in a COVID-19 suffocated global economy.
One thing we do know is that the decision to bring in the aircraft will only translate to increasing cost for the airline and thus the Government, as it would mean salaries for the cabin crew, and not to mention fuel costs which reportedly accounts for about 10 to 12 per cent of operating expenses.
What guarantee is there that the airline will not put in another request for T$1 million for outstanding expenses at a time when Government revenue is at an all time low due to the mammoth drop in visitor numbers brought on by the global pandemic?
The decision to give the green light for Samoa Airways to get an aircraft – either through lease or outright purchase – lacks rational in a post-COVID-19 global economy. Even the C.B.S. Governor Maiava Atalina Ainuu-Enari is finding it difficult to analyse the global economic fallout from the pandemic, to ascertain its impact on Samoa, due to the fluidity of the virus’ impact and new developments globally.
“Again, we strongly caution and emphasize that this growth projection path was based only on the information available up to 23 March 2020,” Maiava said last month, in an email response to the Samoa Observer.
“In these very unprecedented times, there is a high degree of uncertainty in the extent to which any economy will fare, as the economic consequences of the Covid-19 pandemic are yet to be fully realized or how successful the various containment measures by different countries will be over the coming months.”
It makes one wonder if our leaders in Government ever consult institutions such as the CBS, who are paid by taxpayers to provide advice to ensure we avoid economic pitfalls as a nation.
Unilateral decisions made by Government leaders at the spur of the moment – without any form of consultation or a disregard expert advice – has got us nowhere over the years.
We don’t have to look far for examples, especially when it comes to Samoa Airways and its debt-stricken predecessor Polynesian Airlines.