Qantas could be asked to sell its 46% stake in the carrier

Fiji's government has launched a major review of 'Air Pacific, criticising the flag carrier for deteriorating standards and indicating it will assess whether Australia's Qantas Airways should remain a 46% shareholder.

The Fijian government announced in late May that a Cabinet task force will "oversee a comprehensive review" of Air Pacific due to "concern about the airline's operations stemming from increasing complaints from the tourism sector, Air Pacific employees and the travelling public regarding deteriorating standards and performance of the national airline."

It added that "the exercise will include a review of the shareholders' agreement between Air Pacific and Qantas Airways entered into some two decades ago...Government wants to see changes that will ensure that ­Fiji's national interest is not ­subordinated to that of Qantas."

The government says the review will look into staff grievances related to recruitment, training, promotions and retention policies, as well as "deteriorating" in-flight service standards and "chronic delays".

"Government is also concerned at Air Pacific's declining profit in recent years," it says, adding that "the national airline was in a state of stagnation with no major new destination added to its network in a decade or so".

The airline declines to comment but the claims of a deteriorating financial position were shot down when Air Pacific reported in June a substantial improvement in profit for the year ending March 2008 on a 15% rise in revenue. Air Pacific has also committed to a fleet modernisation with Boeing 787s and is looking to order new turboprops.

Source: Airline Business