EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
EAP - The Pacific Infrastructure Challenge - World Bank (2006).pdf
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An alternative reform model is for the Government to operate on a<br />
‘Landlord’ basis, with selected services contracted out to private operators. In<br />
smaller airports, contracts could be awarded for all terminal services instead<br />
of on a service by service basis<br />
Existing traffic to and from the <strong>Pacific</strong> does not appear to justify significant<br />
airport expansion. However, expansion would contribute to, and be necessary<br />
for, an expanded tourist industry within the region. <strong>The</strong> experience in Punta<br />
Cana in the Dominican Republic suggests that if governments are prepared to<br />
support private investment in an entire tourist package, the country may benefit<br />
from increased tourism while limiting government investment and risk.<br />
A.3.7 Institutional Analysis for Air Services<br />
Many <strong>Pacific</strong> countries’ air services are governed by bilateral air services agreements<br />
which provide a framework within which airlines of one country are allowed to fly into<br />
and beyond the other country. <strong>The</strong> frequency, capacity and other operational issues are<br />
normally covered by Memoranda of Understanding (MOUs) accompanying the<br />
agreements. <strong>The</strong> agreements cover the rights of carriers to carry passengers originating<br />
and terminating in foreign territories.<br />
For many years, these agreements have limited the airlines allowed to fly between various<br />
countries to their national carriers, and restricted capacities on routes. Unusually, Samoa<br />
has an open skies agreement with the United States including beyond rights. Now,<br />
<strong>Pacific</strong> Countries are considering liberalization, as outlined in Box A.12.<br />
Box A.12 : Open Skies in the <strong>Pacific</strong>: <strong>Pacific</strong> Islands Air Services Agreement (PIASA)<br />
<strong>The</strong> <strong>Pacific</strong> Islands Air Services Agreement (PIASA) is a <strong>Pacific</strong> Islands Forum Secretariat initiative aimed<br />
at preparing <strong>Pacific</strong> Island countries for gradual adoption of a region-wide ‘open skies’ regime. In May 1998,<br />
the <strong>Pacific</strong> Islands aviation ministers agreed in principle to move towards the liberalization of regional air<br />
services agreements and at a subsequent meting in 1999, they agreed to the concept of a single <strong>Pacific</strong><br />
Islands aviation market with the drafting of a multi-lateral agreement, which the <strong>Pacific</strong> Islands Forum<br />
Secretariat would organize. <strong>The</strong> impetus for these agreements was the recognition that existing bilateral<br />
agreements restricted market access within the region and limited the growth and development of air<br />
transport.<br />
PIASA is due to be implemented in three phases over a period of five years. <strong>The</strong> first phase involves<br />
granting Fifth Freedom rights to new <strong>Pacific</strong> Islands Forum Secretariat countries that do not currently have<br />
international services. Phase two involves extending Fifth Freedom rights to all countries to operate within<br />
the region, and in the third phase Fifth Freedom rights will be extended to all <strong>Pacific</strong> Islands Forum<br />
Secretariat countries outside the region.<br />
Current signatories to PIASA are the Cook Islands, Nauru, Samoa, Tonga and Vanuatu. Protecting national<br />
carriers is one of the key reasons more countries have not yet signed up to this agreement. <strong>The</strong> Association<br />
of the South <strong>Pacific</strong> Airlines (ASPA) has noted that “the national carriers of the region warrant relative<br />
protection from “unnecessary” competition on some profitable routes which have been developed by and<br />
invested in by <strong>Pacific</strong> island carriers”. <strong>The</strong> argument is that the national carriers in the region are operating<br />
in a relatively high-cost environment and would not be able to cope with competition on most routes. It is<br />
feared that this would result in the collapse of some of the smaller national carriers in a similar manner to<br />
the Ansett collapse. This position is supported by Fiji.<br />
In fact, neither the Ansett collapse nor the financial difficulties of Air New Zealand, have resulted in fewer<br />
(or no) air services to New Zealand. On the contrary, several new carriers have started flying to the country<br />
on main routes, such as United Arab Emirates and <strong>Pacific</strong> Blue.<br />
Source: “Fiji’s position on multilateral air service agreements” <strong>World</strong>wide Air Transport Conference:<br />
<strong>Challenge</strong>s and Opportunities of Liberalization, 2003; <strong>Pacific</strong> Islands Forum Secretariat and Castalia<br />
Research<br />
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