Welcome to the Cook Islands Herald

HERALD WEEKLY ISSUE 431 : 29 October 2008

Decision soon on LA deal with Air New Zealand

“We are not going to pay $8 million,” Tourism Minister Hon Wilkie Rasmussen advised the Herald on Tuesday afternoon.
The Minister was responding to a news item on TV One News on Sunday evening by Pacific reporter Barbara Dreaver that the Cook Islands would have to pay Air NZ $8 million to retain the Los Angeles flight.
The Minister explained the Cook Islands had been requested by Air NZ to consider this amount for next year.
The Minister said he wrote to Air NZ last month about an invoice that had been received from Air NZ asking for an extra $3 million on top of what was normally agreed on.
The Minister said because the yield on the LA to Rarotonga route was not too profitable for Air NZ, they were thinking of dropping the flight. He said government knew that on 22nd November the contract would come to an end and would be reviewable so government wrote to Air NZ three months prior to the termination clause coming into effect, that we renegotiate and amend that part of the contract so we could explore available options.
In the TV One News item, Dreaver had referred to Samoa and Tonga also being asked by Air NZ to pay more. Samoa and Tonga said the Minister had large populations of their own people in LA and the USA so they wanted the service retained. We do not have large numbers of Cook Islanders in LA.
The Minister said at the start of the agreement, there had been a70-75% occupancy of seats but this had declined and there had been fuel price increases. So we had come to the point of reviewing the agreement. In the last two days Air NZ had indicated it was considering options.
This said the Minister is why he led a Tourism delegation to Tahiti to discuss options with Air Tahiti Nui. They fly LA to Tahiti to Auckland and Sydney.
Two main issues were discussed one being the option of buying seats on a Sydney to Rarotonga leg and secondly continuing the LA connection. We had been getting 20,000 to 30,000 people on the LA route during a seven month period the Minister said and an agreement with Air Tahiti Nui was an option if Air NZ decided it was no longer profitable to retain the LA connection with us.
The Minister remains optimistic but pointed out Air Tahiti Nui was heavily subsidized by the French government and was losing an estimated $40 million per year. Visitor numbers to Tahiti had dropped by a greater rate than ours with visitor numbers being down by 24% and expected to drop further to 30% compared with last year.
By contrast we were maintaining our numbers due to the flights being short haul and having 14 flights per week from NZ.
In the next month government would have to decide if it was going to be viable or not to carry on with Air NZ. The Minister said government did not want to be put in a position where it would be too costly.
An Air NZ representative will be here for the next three days for discussions beginning on Wednesday and the Minister will be going to NZ soon to talk to Air NZ. He will also be meeting with the NZ government on matters relating to Air NZ. The Tourism CEO and some technical staff will accompany the Minister.
In a clear reference to the current global situation, the Minister said it was a reality now that we must play a role in the cost of the airlines. Samoa and Tonga had followed our example in paying Air NZ a subsidy.

Herald Issue 431 29 October
- Decision soon on LA deal with Air New Zealand
- In Search of Obama
- Takitumu Tour All Go!
-Teiti Tupuna our 11 year old superstar at the Manea Games 2008
- Changes to next Miss South Pacific Pageant