Airline asks for $12 million loan

Samoa Airways has asked the Unit Trust of Samoa (U.T.O.S.) for a $12 million loan.

The Government has in recent months denied that the national airline has been operating at a loss with the Minister of Public Enterprise, Lautafi Selafi Purcell, again dismissing reports that the loan is a financial assistance package to rescue the airline.

“Every starting company must have a backup plan and that calls for additional funding in case of an emergency and the company does not scramble to look for money hence the loan with U.T.O.S.,” said Lautafi. 

“With any starting company, especially an airline which is very costly, during its first 24 months will operate on a loss. However, for the Samoa Airways that has changed and our flights have been full since last month.”

While the Minister denied the Airline was in a financial conundrum, he admitted that the Government is paying the wages for its pilots and cabin crew until a local crew is hired. 

Prime Minister Tuilaepa Sa'ilele Malielegaoi, speaking during his weekly press programme, did not confirm the loan request.

“However, that would be the move taken by an intelligent C.E.O. when there are no funds to carry out the operations of the business. 

"When there are big companies in the country, the funds invested into U.T.O.S. can be used to purchase shares or invest into these said companies – meaning they too have to invest monies and in return receive dividends for the investors,” he said. 

“We are all aware that businesses at times have issues with their cash flow and while the Samoa Observer is questioning the (airline’s) request, even they have loans too like every business,” he added. 

The expansion of the national airline’s international service also justified the need for Samoa Airways to consider buying a second aircraft that would meet the demand. 

The Prime Minister said there were ‘no hidden agendas’ behind the airline’s loan request and it was a normal business transaction.

“I am happy the question is being posed by the Samoa Observer, as we all know that their questions insinuate there are hidden agendas. But I am telling the newspaper there are no hidden agendas. I have not been informed, because these are business transactions and there is no need to inform the Government.”

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