Thursday 27 April 2023 | Written by Supplied | Published in Editorials, Opinion
Some argue that the key vulnerability is the tourism industry itself, but I disagree. The real issue is the dependence of the Cook Islands on Air New Zealand's effective monopoly. The lack of competitive air services has led to deliberately restricted seat capacity to drive up airfares, which reached exorbitant levels. Consequently, the Cook Islands tourism industry has not achieved a fraction of its potential, and the Cook Islands economy and people have suffered unnecessarily and will continue to suffer as long as this situation is allowed to continue.
To unlock the Cook Islands economy's full potential, we must secure our routes to key strategic airports, including Auckland in New Zealand, Sydney in Australia, Papeete in Tahiti, Nadi in Fiji, and Los Angeles in the United States. We need regular, convenient, competitively priced links to each of these airports, with double daily services into Auckland and every second day into Sydney, Papeete, Nadi, and Los Angeles.
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Without greatly improved air services, the Cook Islands will continue to underperform its economic potential and experience continuing out-migration of its people to Australia and New Zealand, as well as difficulties repaying our massive COVID debts. Enhancing our air services network is the primary economic tool to turn around the Cook Islands' overall economic fortunes.
Some argue that there is some unarticulated "reason" that the Cook Islands cannot have its own national airline, but I disagree. Our South Pacific neighbors such as Tahiti, Fiji, Vanuatu, Solomons, and others have their own national airlines, and we can learn from their experiences. We need competent boards and management to run the national airline, appointed for their business competency rather than political reasons.
To achieve this national objective, a joint venture between the Cook Islands private and public sectors is necessary, blending the skills, expertise, and financial resources of each to deliver what the Cook Islands economy truly needs. We require at least two short-haul jets and one long-haul jet to underpin the Cook Islands tourism industry and, in turn, the Cook Islands economy. There are various options for organizing and financing a national airline. It is not rocket science. It is business economics. Many of our Pacific neighbours successfully operate their own national airlines.
Benefits of a national airline include increased tourism, economic growth, job creation, and reduced dependence on foreign carriers. Key risks involve high initial investment, ongoing financial sustainability, and potential mismanagement. These risks can be managed through a well-structured joint venture, competent management, and leveraging experiences from neighbouring Pacific countries.
The next steps would involve a feasibility study, developing a strategic business plan, exploring financing options, and engaging in stakeholder consultations. Indicative numbers for revenue and investment are subject to further research and analysis, taking into consideration various factors such as market demand, fleet size, route planning, and operational costs.
In conclusion, addressing the fundamental problem facing the Cook Islands economy - the lack of adequate air services - is crucial for securing our route to key markets in our foundational tourism industry. Our local tourism industry continues to have strong demand that cannot be satisfied due to the difficulty of getting guests here conveniently and cost-competitively. Establishing a national airline is the only way to achieve the Cook Islands' full economic potential, and we cannot afford to waste any more time or effort in pursuing this pivotal national goal
Tata Crocombe, managing director of the Rarotongan, Sanctuary Rarotonga and Aitutaki Lagoon Resort.