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Papeete Pumps Another $11M Into Struggling Air Tahiti Nui

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French Polynesia’s government today obtained yet another endorsement from its Legislative Assembly to pump another US$11 million (one billion French Pacific Francs) into its financially troubled international airline Air Tahiti Nui.

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The financial buoy is to materialize through the release of liquidity funds to help the airline, which has been undergoing turbulences for the past few years.

Opposition leader Edouard Fritch told MPs earlier this week before the vote of the fresh injection that it was currently anticipated Air Tahiti Nui would finish 2008 with an accumulated deficit of some 4.8 billion French Pacific Francs (CFP, US$53 million).

Fritch said he feared the latest cash injection would not be the last.

Early September this year, French Polynesia’s government injected another 2 billion French Pacific Francs (US$22 million) into Air Tahiti Nui.

Air Tahiti Nui “is the main engine of French Polynesia’s tourism industry. Just like other international airlines, it now has to withstand a rise in its fuel-related operating expenses,” the Cabinet meeting said at the time.

The ministers’ gathering also stressed that ATN has “redefined” its strategic policy, in terms of promotion of the destination, fleet renewal, connections and partners.

“The government will be following particularly closely the implementation of measures aimed at boosting (ATN’s) activity during the next five months of the (remaining) financial year. This period will be decisive for the future of Air Tahiti Nui,” the September release went on to state.

The government of French Polynesia is Air Tahiti Nui’s major stakeholder.

In 2005, ATN (which the same year introduced new direct routes to Sydney, Los Angeles and New York) accumulated around six billion French Pacific Francs (CFP, around US$60 million) in losses for that year’s financial exercise.

At the end of the following financial year (2006), losses totaled an estimated US$20 million.

For the past two years, however, ATN has been under ongoing fire among criticisms of perceived shortfalls in management and strategic decision-making.

Two years ago, a report by international aviation consultants Simmons & Simmons, commissioned by then ATN Chairman Eric Pommier, slammed a perceived chronic instability in the airline’s management (with a rapid turnover in CEOs and Chairpersons) and the apparent “lack of any plan to bring the company back to financial balance.”

The Simmons & Simmons’ recommendations included a regrouping of all on-the-ground resources within a single headquarter, the development of a new training scheme for employees, as well as a push to computerize, whenever possible, key areas in the sales and management departments.

Like most airlines in the world, ATN has been faced recently with a drastic increase in fuel costs, a direct result of a surge in world oil prices. This had also combined with a significant drop in tourism arrivals.

However, in spite of its financial woes, Air Tahiti Nui was late August granted the “Best airline” and “Best Cabin crew” awards in the Pacific region category, as part of the World Airline Awards 2008 published by international agency Skytrax.

The French Polynesian company has been netting the same awards for the past five years.
This year, ATN celebrates its tenth anniversary.

Its inaugural Pape’ete-Los Angeles flight took place on November 20, 1998, on its only aircraft, an Airbus A340-200. ATN now has a fleet of some five Airbus A340 and its destinations include Sydney, Auckland, Tokyo, Osaka, Paris ad more recently New York.

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