Polynesian Airlines and Polynesian Blue

In July, the Australian budget airline Virgin Blue signed an agreement with the Government of Samoa to take over Polynesian Airlines' longhaul routes. A new carrier, Polynesian Blue, was formed, with ownership split between Virgin (49 percent), the Samoa Government (49 percent), and the Aggie Grey family (two percent). In early November, Polynesian Blue began flying to Apia from Sydney and Auckland three or four times a week.

Meanwhile, the Government of Samoa retained 100 percent ownership of Polynesian Airlines' shorthaul turbo-prop services from Apia to Savaii, American Samoa, and Tonga (Nukualofa and Vavau). Polynesian Airlines has also held onto their codeshare service with Air Pacific to Nadi, Fiji, but the flights to Hawaii have had to be suspended as Polynesian's landing rights at Honolulu could not be transferred to Polynesian Blue.

Samoa is taking a risk by putting all their eggs in Virgin's basket. Currently, the arrangement is working well with PolyBlue delivering full flights to Samoa without the large government subsidies Polynesian Airlines used to absorb. But the moment Samoa ceases to be flavor of the month for Australian tourists, Virgin will pull out fast.

That's the rationale behind government-owned national airlines like Air Pacific (Fiji), Air Tahiti Nui (French Polynesia), and Aircalin (New Caledonia), which can be counted on to put the interests of their home countries ahead of those of distant shareholders. Until Air Tahiti Nui was created in 1998, French carriers like UTA, Corsair, AOM, and Air Lib wrought havoc on French Polynesia's tourism industry by abruptly canceling services for reasons of their own. Tourism to Samoa, Tonga, Fiji, Vanuatu, and the Cook Islands is currently booming thanks to Virgin's cheap fares, but the story isn't over till it's over.

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