Reality kicks in for Samoa Airways
After the honeymoon phase, the reality of running a fully-fledged international airline in such a cut throat industry has started to kick in for Prime Minister Tuilaepa Sa’ilele Malielegaoi’s administration.
And by the sound of things, the picture is not pretty at all.
What with huge overhead costs, low bums-on-seat numbers and a whole lot of other financial challenges, Samoa Airways was never going to be an instant success.
But then we knew that and we warned that the Government was taking a huge risk. And as we’ve said before, this could be Prime Minister Tuilaepa’s most brilliant move or it could be the final straw that breaks the camel’s back.
As proud Samoans, we sincerely hope the latter is not the case.
That’s because whatever happens to Samoa Airways, the consequences will always fall on the shoulders of taxpayers. Which means more taxes, suffering and more debt.
The truth is that running an international airline in this day and age is not something you enter into blindly. Folks, if it was difficult back in the days of Polynesian Airlines which nearly bankrupted this country, it would be even more challenging now given the demands and dynamics of today’s competitive business world.
But don’t say the government had not been warned.
Sadly – and although it’s early days yet – from what we’ve been told, things are looking rather grim. Which is why we find the denial by the Minister of Samoa Airways, Lautafi Fio Purcell, rather surprising.
Earlier this week in a story titled “Minister denies Airline loss claims,” the Minister flatly rejected claims that the airline was already running at a loss.
Several sources – including people from within the Government – have told us what is happening. Although they could not put a figure to the loss, they claim that it is substantial and growing every month.
Now when the Samoa Observer contacted the Minister for a comment, he quickly rubbished the reports.
“That is not true,” he said. “Where did you get your figures from? That’s not true.” It’s irrelevant where the figures come from. What’s more important is if they are true or not. So let’s wait and see then, shall we?
But you don’t need to be super intelligent to know what’s going on.
One can easily find out from going to Faleolo Airport to wait for friends and relatives. Many of them will tell you how empty the flights have been. In some cases, there are only one or two people in the business class. In some cases, none at all. What that means is that they point to the fact that the load numbers have been quite low. And for an airline that is reportedly paying US$500,000 (T$1.25 million) a fortnight to lease the aircraft, it is a disaster in the making.
Now let me tell you something else.
Why the Government is secretive about some of the costs for a publically-owned airline baffles the mind. Last year, the Government had repeatedly refused to confirm or deny reports about what it was paying to Icelandic Air.
“These are commercial secrets, it cannot be revealed,” he said. “These things are commercial contracts, and if you inquire with any airline companies, they will never allow that to be known.”
Told that it’s a Government-owned airline; Tuilaepa again intervened and said “when the accounts are available that’s the time you will know.”
Well that’s a long time away but okay.
As proud Samoans who want Samoa Airways to succeed, let’s hope that by then they turn things around.
But it’s going to be hard. Extremely difficult.
Have a wonderful weekend Samoa, God bless!