Samoa Airways: no place for pride in policy
Of all the contentious projects entered into by the previous Government, the shambolic management of Samoa Airways must surely rank as the most poorly thought through.
There were questions raised about infrastructure projects such as the Tiavea Airport and its short runway or the $20 million-plus Tanumalala Prison with a high security fence that inmates found little trouble getting around.
But whatever else might be said about these projects, they at least created jobs for local employees and pumped money, however inefficiently, into the local economy.
The same cannot be said for the disastrous process of leasing of a new Samoa Airways jet: a case of substituting the usual dispassionate measures for what makes good policy with national pride; an irrational project that has brought us nothing but job losses and financial losses when we can least afford them.
It was more than a year ago that the previous Government gave us the most transparent insight into the progress of the project of acquiring a new plane for the national carrier.
A series of unfortunate events connected to a safety failure that led to the Boeing 737 MAX model’s grounding led us into making hasty and costly arrangements with the Malaysian headquartered Malindo Air for what was known as a “wet lease”.
That lease, which came at a cost of hundreds of thousands of American dollars a month, was curtailed soon after the nation’s borders were closed due to COVID-19 restrictions.
For a moment it seemed that the Government was going to follow the only possible logical response to a business environment in which international travel had fallen to a fraction of its international levels and the nation’s borders were closed to incoming passengers: a wait-and-see approach.
“When will the plane arrive? No idea,” said the former Minister of Samoa Airways, Lautafi Fio Purcell, in an interview with this newspaper in May of last year.
“When will flights resume? When borders are open and when we have a plane,” added.
That was logical business thinking. But it did not last long.
Only a week later did the former Prime Minister, Tuilaepa Dr. Sa'ilele Malielegaoi, contradicted his former Minister when he said: “We have decided to fly our new aircraft in [by] around the end of June.”
And here we are, 13 months later, and it is clear that the former Government’s promise has never materialised
Why Tuilaepa was so hell-bent on procuring a plane for the national carrier was never made clear.
Late last year this newspaper revealed that the airline was in seriously bad financial shape. It owed more than $400,000 to the local business the Aggie Grey’s Hotel.
Its financial reports for the fiscal year of 2018-2019, before the ravages of the pandemic had even hit the international tourism industry that its liabilities exceeded its assets by some $11 million.
That figure can only have reached toe-curlingly high levels of debt as the airline has been unable to bring in virtually any revenue and forced to lay off the majority of its staff, after progressively cutting their pay.
Creating a successful airline was clearly a fixation for the former Prime Minister, despite his having been in Cabinet in 1992, at a time when the airline’s debt reached $200 million and nearly brought the country to bankruptcy.
“There is nothing to worry about!” Tuilaepa said after the Samoa Observer revealed the true state of the national carrier’s finances.
“So what if the losses accumulate to $100 million, the [airline] is to cater for our people.”
This was an utterly reckless statement by the previous Government and ignores the costs borne by the airline’s unpaid contractors, its employees and, of course, the taxpayer.
These were made plain in an article on the front page of the Weekend Observer (“Grounded: new jet not fit to fly) makes clear that the financial decision making by the H.R.P.P. Government will loom large over Government finances for this term of Parliament and beyond, and seemingly for no good reason.
In an interview with this newspaper the new Minister of Samoa Airways, Leatinu’u Wayne Fong, revealed that the Government had left the Government with a bomb that was going to blow a hole in the budget.
He said that the new Government had been briefed by the head of Samoa Airways, Seiuli Alvin Tuala, that laid bare the shabby deal the new Government had entered into and for which we are now paying.
“Sadly, they had already signed a six years lease contract with the company which owns the aircraft,” the Minister said.
“So basically we’re stuck with it now. So now we are looking at ways to use it and to generate revenue so it can service the monthly lease, especially during COVID-19 times with border closures.”
The new aircraft is, according to the previous Government, taking more than USD$250,000 out of the budget every month (or more than $675,000).
At $8.1 million a year that is a lot of teachers’ or doctors’ salaries.
It was also revealed that the airline is not even certified to fly in the airspace of its two largest markets, New Zealand and Australia. (Aside from that Australia is almost in complete lockdown with citizens refused permission to leave the country).
The process of securing approval and appropriate training from the Pacific Aviation Safety Office is not a simple one.
It requires spot checks, evidence that pilots are qualified to fly that model of aircraft and that maintenance measures are in place to ensure the airline’s safety.
As was revealed on Saturday another Cabinet Minister, Olo Fiti Vaai, has refused to grant the airline permission to land in the airport without certainty about how the airline’s qualifications will be met and its contractual obligations will be met.
We wish the new Government the best of luck in extricating itself from the financial that the new jet proposes; given the amount of money on the table every option should be considered, including breaking the contract for a fee or even sub-leasing the aircraft for ourselves.
Nations often view their airlines as a source of international national pride. But that should never be a factor in policy making which should be a dispassionate process of spending taxpayers’ money to generate its maximum benefit for the people.
A plane that made no financial sense should never have been on our policy agenda as we continue to be plagued by issues such as rising poverty and declining standards of health and education.