News From NZ Came-A Hammer Blow To Samoan Tourism

Extremely Bad News for Samoa and Tonga too with this announced cancellation.In typical South Pacific fashion someone comes up with some money days late and then complains of being ignored.
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SAMOA, TONGA PROTEST AIR NEW ZEALAND PULLOUT
Airline declines offer to subsidize losses+

APIA, Samoa (Samoa Observer, Nov. 7, 2010)–
Air New Zealand has been accused of dumping Samoa and Tonga after a multi million tala proposal made to save the Apia - Los Angeles flight was termed "too late," an investigation by the Sunday Samoan has discovered.

click here to read the rest of the long sad story

Not good for tourism. Hopefully they can get some agreement in the future. Air NZ should have allowed for island time in the negotiations - but as a publicly listed company on the stock exchange they can't run non-profitable routes despite any treaties between the countries.

Maybe they need an islander or two on the board.

What a pity!

I guess this is bad news for those coming from/via the US or wishing to combine both countries in the same trip, but most visitors coming from NZ and AU seem to use cheaper Pacific Blue these days - the main reason why Air NZ no longer makes much profit there, I guess.

Those coming from North America will probably find flying on Air Pacific (via Fiji) the cheapest option then.

Either via Honolulu (Air Pacific from there) or via Fiji (on Air Pacific as well). For Europeans there are options via Seoul and Fiji with Korean Airlines. They have a flight to New Zealand with a stop at Nadi, as far as I remember. Or via Hongkong, since Air Pacific is flying there too.

Anyway it is bad news. But who to blame I am not really sure. It seems that the whole problem started in Tonga. For them going to LAX via Apia (stopover) or via Nadi might be not much difference.

Here is what Air NZ said:
http://www.samoaobserver.ws/index.php?option=com_content&view=article&id=29275:air-nz-&catid=1:latest-news&Itemid=50

I don't understand some of the statistics on the LA/Apia/Tonga flight (which I have taken many times)

The planes were always, always packed to the rafters... No empty seats.

I would think the theory of competition has cut into Air NZ's profitability on this route.

Damn shame, but that being said, I can't imagine it being anymore expensive flying LA/Auckland then up to Samoa as there are often good deals to Auckland to compensate for the expense of getting to Apia from Auckland...

"The planes were always, always packed to the rafters... No empty seats...."
Yes but the tickets may have been sold dirt cheap @ the last minute-which means no profit.

The Samoan news article as linked is typical of small/nation small mind -blaming another country/the airline/anyone anything except their own sloth and disorganisation.

Dunno about Samoans (who could also fly from the US via Pago, I guess), but a lot of Tongans were/are already flying from the US to Tonga via Fiji on Air Pacific even when the Air NZ route was/is still up and running.

For Europeans, the AP route via HK is probably the best bet, and AP is now offering very good fares on the Nadi-HK route, and increasing frequency.
I may never have to go through AU from Asia myself!

I'm just not seeing why the LA-Fiji-Samoa route is so much more onerous. It does require an overnight stay in Fiji, but the upside is you can break your stay for multiple days without an extra charge. Bula pass specials can make the Samoa add-on quite affordable.

I guess it would be a big deal if they were picking up lots of tourists breaking their LA-Auckland flight with a Samoa trip.

Tonga and Samoa were very convenient and popular stopover destinations for people flying to and from Auckland to the US and maybe further on to Europe. But Air New Zealand does not have any interest in that. You could already see it on the choice of aircraft they used on that route - most likely the oldest one in their fleet. And there had never been any real bargains for that route in terms of fares. Not at all - they really knew that they did not have a competitor.

Maybe they are more interested to keep the Cook Islands connected but even there the cancellation of the onward flight to LAX has been announced by Air NZ many times already before asking for more subsidies again. They do not care about the islands, simple as that. China and Asia overall is what they have in mind.

I really do not always agree with the Samoan Prime Minister statements but in this case I really do. This cancellation had been on Air NZ's agenda for a long time. Maybe Tonga gave them a reason to do it now but I am sure that they were just waiting for it.

We will see how the Samoan travelers - by far the majority of customers here instead of overseas tourists - will reward this policy and maybe reconsider their commitment to Air New Zealand overall. So far they had been very popular due to service and punctuality. But we are happy that there are other airlines too that we can give our money to.

This is definately more of a consequence for Samoan and Tongan nationals than for tourists.

As for impacting defacto Canadians and American tourists I have run into in Samoa in my years, I believe (form the numbers I see there) that this is not going to be major loss for Samoan tourism. as their numbers there are quite small, comparatively... As for the Euros, this will definately put the "RTW" backpacking kid's Samoan stopoever to an end, but the better healed German and Swedish tourists, many of whom are frequent return visitors will continue to make the arduous journey to get there as travelling to unique destinations seems to be in their blood and a little route cancellation will hardly stop them...

This will have HUGE consequences for the beach fale operations who rely heavily on the under 30 backpacking, "I get a Samoan layover with my Round the World airpass" crowd... Round the World air passes are issued for participating airlines, such as Star Alliance (of which Air NZ is a member). Air Pacific is not... neither is Virgin Blue... As well, restrictions on RTW tickets will not allow the holder to "backtrack".... So even in you wanted to do a Samoan layover, it will become impossible as there are no "forward" destinations any longer... You would have to come to Samoa on a seperate ticket.

The posh resorts are less likely to be so heavily impacted as they seem to cater almost exclusively to Aussie and Kiwi honeymooners and retirees..Many of these coming on Virgin Blue packages.

Just my two cents...

islandboi321: ah, this makes more sense. Was forgetting all those RTW ticket brits would be using Air NZ and not Air Pacific. I agree with your assessment of the U.S./Canadian tourists, what few people I found from the U.S. were not lured by the convenience of a direct U.S./Samoa flight.

Hardly any brits here. But quite a few Swedish, German, Swiss and Austrian. And many of them on RTW with Star Alliance. Their national carriers are part of it too so Star Alliance is quite popular in those countries.

British Airways is part of the Oneworld Alliance together with Qantas. They have some code sharing with Air Pacific but Samoa or Tonga are not in it.

Air Pacific flights can be included in Oneworld's Global Explorer RTW tickets.
Of course a Samoa RT would be extra mileage using AP, making Fiji a more logical choice for RTW travelers using Oneworld.
Backtracking within a single region is allowed, so it would be possible to add Samoa if someone is keen enough.

Global Explorer

Sorry, I may have missed this...

Is the flight already terminated or is the termination for a pending date?

Still flying (of course they would not want to miss collecting their dollars during the busy holiday season). January 25th, 2011, will be the last flight back from LAX as far as I read.

Another knife in the back!At least thats how some will see this although I cant see it making much difference.

AIR NEW ZEALAND CUTS BUSINESS CLASS TO SAMOA
Upper-end tourists may not travel

By Aigaletaulele’ā F. Tauafiafi

APIA, Samoa (Samoa Observer, Nov. 23, 2010) - Air New Zealand has dealt yet another blow to Samoa – cutting the business class from the services it provides to the island.

Last month, the airline announced the termination of its long-haul Apia-Los Angeles flight, raising the ire of tourism and business industry members.

As of this month, the airline will only provide economy class, commonly referred to as "cattle class" seats.

With Polynesian Blue providing cheap no-frills flights, members of the business community fear Samoa will find it harder to attract the upper-end corporate travellers.

It is certainly a strike against the Samoan Tourism Authority’s move to improve its 2009 record 300 million tala [US$123 million] plus yield.

STA marketing manager, Dwayne Bentley says the STA is targeting a six to seven per cent annual growth from now until 2013.

Former long-time Air NZ employee, Faleomavaega Vincent Fepulea’i says the Apia-Auckland leg is one of Air NZ’s most profitable.

"I don’t recall at any time while I worked there when it made a loss," he says.

A confidentiality clause prevents him revealing profit figures but: "it’s in the millions of tala per year.

"So I’m disappointed they didn’t feel something to reciprocate that loyalty from the Samoan public."

He says the loss of business class service is even more concerning.

"It has ripple effects down the economic chain especially with strategies by Samoa to be a regional hub hosting event and meetings attracting corporate clients," Faleomavaega says.

"So the no frills, cattle service coming on the back of losing the Apia-LA route has huge impacts."

However, he’s not surprised as the behavior of travelers has changed and the airlines business is now all about the numbers.

"Everything is driven by the bottom-line," he says.

A more-than 50-year history between the airline and Samoa is sadly all about the money, says Faleomavaega.

Earlier this month, Prime Minister Tuilaepa Sailele Malielegaoi said the airline’s motives were less than honorable.

"They are not willing to commit to developing this route," he said. "It’s a benefit to Air NZ only and they were not flexible in their dealing with us."

Even a future meeting with NZ Prime Minister, John Key will have little bearing on Air NZ’s decision he says.

"The only thing in the final analysis in any discussion – profitability is the bottom-line," said PM Tuilaepa.

"There’s been a long song and dance by NZ about the unprofitability of the route.

"So in terms of the commercial viability for the leader of NZ, I can almost anticipate that whatever his stance, he will lean towards the advice rendered by their airline.

"If the Airline Executives brief him that the route will run up huge losses, what can he do?"

NZ High Commissioner in Samoa, Nick Hurley says his government has provided NZ$2million [US$1.5 million] in direct subsidy to the service to date.

"And have further commitments through to the end of January 2011 of up to $NZ1.75million totaling overall $NZ3.75million [US$2.9 million]," he says.

He confirms PM Tuilaepa’s statement that negotiations broke down when a cap on subsidy for potential losses was removed.

"What has been difficult for the three governments to manage has been the requested shift from a defined subsidy, to an uncapped liability for potential losses incurred by the service."

The removal of the cap drew a strong statement from PM Tuilaepa.

In response Air NZ’s Manager for the Pacific Islands, Peter Walsh says: "I cannot believe there would be a suggestion that Air New Zealand would operate fraudulently, especially given the fact the national airline is also a publicly listed company and is audited twice yearly by PricewaterhouseCoopers.

"In addition Air New Zealand has an open book policy for the Los Angeles service with its partners the Samoan and Tongan governments which include monthly financial reporting and face to face meetings every three months."

With the Air NZ’s Apia-LA route coming to an end in January 2011, Mr. Hurley says: "The New Zealand Government remains very committed to supporting the development of tourism within Samoa.

"We are currently scoping a new and expanded engagement with the tourism sector itself.

"We believe there is much opportunity for Samoa to strengthen market demand which ultimately is the factor that can drive and sustain air services."

Despite this fact, Faleomavaega says, "Tourism is the biggest income earner for the country.

"Attracting tourists to Samoa benefits the whole country but without these direct flights and the cattle shuttle service we can’t maximize on the good things government has done to develop tourism.

"We’ve seen changes to laws making it easier for foreign investors to build hotels here and support to the local hoteliers in the travel industry.

"A lot of money has been given to the Tourism Authority (10,221,359 tala [US$7.8 million]for 2010/11) to make things happen.

"So this is a huge set-back.

"Because if you look at it in terms of Fiji and Samoa as a regional hub, people will rather go to Fiji because of the frequency of flights, their infrastructure in terms of hotels and hospitality is still way better than us.

"As Samoa becomes destination you get to via a cattle class service it impacts on corporate clients, the upper market for regional conferences would probably opt for Fiji because these travelers want their luxuries, they want their comforts.

"So instead of coming to Sinalei or Aggies or host a function here, they would go to our competitors."

The solution says Faleomavaega, "Samoa 15-20 years ago has come a long way in terms of incentives and infrastructure put in by government.

"It’s time for the private sector to step up and be counted."

Samoa Observer:

There will still be Business Class on Air NZ between Auckland and Apia. Two flights per week - so the rich and famous can still reach our shores in style.