The South Pacific may seem like paradise, but few airlines based in the islands would call it that in light of the economic woes and recent political coups that have plagued the region.

Airlines in Fiji and the Solomon Islands have been especially hard hit after unrest caused huge drops in air traffic.

Air Pacific never stopped flying, but it cut flights during Fiji's coup and those reductions remain in effect. Tourism has been hit hard. Reports predict that Fiji faces at least a two year recession. Laisenia Qarase, the new prime minister, warns: "If we allow the crisis to continue, the Fiji economy will be ruined."

Solomon Airlines restored domestic service within a week after the coup attempt in Honiara, but it took more than a month to resume overseas flights. Even now, because of an Australian travel advisory, Solomon Airlines is unable to fly the Boeing 737 it normally leases from Qantas Airways.

In the interim it is subleasing a 737 from Air Vanuatu and looking for another so it can operate a second weekly flight. It may be months before it resumes a normal schedule.

Air Niugini's chronic troubles have deepened. The Papua New Guinea flag carrier has sacked general manager Andrew Ogil after suspending him twice in a running restructuring debate. Three years ago, after talks failed to convince Qantas to take an equity stake and assume management, Air Niugini hired Deloitte & Touche to devise a plan to make it more attractive to foreign carriers. The government still wants to find a foreign investor and manager, but restructuring remains controversial.

Air Caledonie International seems to have avoided the region's turbulence. Air France plans to withdraw from the French island territory of New Caledonia and give its regional routes, including one to Tokyo, to Air Caledonie.

Source: Airline Business