Fiji’s flag carrier plans to take over one of the island group’s local airlines so that it can offer online domestic feed between its international flights and Fiji’s outer islands.

Air Pacific has agreed to buy Sun Air, one of Fiji’s two domestic airlines, subject to due diligence. If it decides not to buy Sun Air, Air Pacific says it will launch its own domestic airline from scratch.

Air Pacific currently does not fly domestic routes. Its plan to enter domestic service appears to be in response to competitive pressure from low-cost Australian and New Zealand rivals. Without online connections to Fiji’s outer islands, where some resorts are located, Air Pacific has little to offer that would give it an advantage over Freedom Air and Pacific Blue on Australia or New Zealand flights. Visitor arrivals from these two countries are setting records, thanks in part to traffic stimulation by the low-cost carriers.

Air Pacific made an initial offer to buy Air Fiji, the other domestic airline, but was turned down. If it buys Sun Air, it plans to replace the carrier’s entire fleet of 11 ageing turboprops. Air Pacific is evaluating types and delivery dates for new aircraft, with a target launch in December.

Fiji’s government, which owns 51% of Air Pacific, has also started talking to Airports Fiji about upgrading outer island airports to accommodate bigger aircraft. John Campbell, Air Pacific’s chief executive, concedes he may need to start with smaller aircraft simply because of the time required to improve some airports. But he says Air Pacific is willing to offer financial backing on some airport projects to accelerate them. Work on the first upgrade is set to start in the first quarter of next year.

Source: Airline Business