Royal Tongan Airlines

Royal Tongan Airlines was the national airline of Tonga operated from 1985 until liquidation in 2004. It was a government agency and operated interisland services and international routes.

History

Formative years

In 1983 a feasibility study was undertaken by All Nippon Airways to investigate the setting up of a Tongan airline. It was planned for Friendly Island Airways to begin operations in October 1984, with technical and managerial assistance provided by the Japanese airline, and for the airline to operate a surplus ANA Boeing 737-200. The plan was dropped in favour of Tongan participation in Air Nauru, which was expected to take delivery of a third Fokker F28 and was also expected to extend the Nauru-Apia route to Tonga. At the time, flights between Apia and Tonga were operated exclusively by Polynesian Airlines.[1] In 1985, King of Tonga Taufa'ahau Tupou IV visited the

International expansion

A delegation from the government of Niue travelled to Tonga to try to persuade Royal Tongan to continue flying to Niue from Tonga past 28 October 2002; that date on which the flights were to cease, and Polynesian Airlines would begin jet service to Auckland. Royal Tongan told the Niuean government that it could no longer justify the service.[11]

In 2002, the airline leased a Boeing 757 from Royal Brunei Airlines in order to restart international flights. The deal saw the aircraft being leased for a period of five years, initially as a wet lease later to be changed to a dry lease.[12] Prince Tuʻipelehake, and a majority of Tongan MPs, opposed the government giving Royal Tongan financial support with public funds due to the high levels of debt the airline was already in.[13]

Royal Tongan service of the 757, nicknamed 'Ikale Tahi, was inaugurated at Fuaʻamotu International Airport on 23 November 2002,[14] with thrice-weekly flights from Tongatapu to Auckland, with a once-a-week extension to Sydney. In 2003 it obtained its own air operator's certificate with a view to launching flights to Honolulu. On 19 December, the airline was due to launch a once-weekly direct flight from Tongatapu to Honolulu, marking the entry of the airline in the American market.[15] The Director of the Tongan Human Rights and Democracy Movement claimed the restructuring of the airline suffered from a lack of transparency. Lopeti Senituli noted that Tongan Prime Minister Prince ʻUlukālala Lavaka Ata wrote to the board of Royal Tongan Airline and instructed them to resign. At the same time, he noted that Shoreline, a company owned by the prince, had expressed an interest in taking over the airline.[16] The airline commissioned KPMG to review the airline's financial position, and in November 2003 the report by the accounting firm concluded that the airline was nearly insolvent and that too few passengers were flying on the airline's international routes. The review found that Royal Tongan had lost US$5.5 million in the first nine months of its international operations.[17] It was also determined that whilst Royal Tongan expected a 65% load factor on these flights, the actual figure was closer to 34%.[18] In dismissing KPMG's review, CEO Logan Appu, stated that the airline would continue to operate internationally, and confirmed that the airline would begin flights to Honolulu in December 2003,[19] in spite of the report recommending that Royal Tongan ditch the international flights and concentrate only on domestic services. People's Representative Feleti Sevele noted that report suggested that the government would need to inject US$10 million into the airline, whilst the entire Tongan budget is only US$50 million.[20]

The introduction of flights by Royal Tongan to Rarotonga sparked a price war with Air New Zealand. Five night packages to Rarotonga before Royal Tongan entered the scene cost approximately NZ$1299, and after the airline entered the market prices dropped to NZ$829–$899 for seven night packages.[21][22]

Towards liquidation

The airline stopped selling international flights on 23 April 2004, and announced that the last international flight would leave Tongatapu for Auckland the following day, whereby the Boeing 757 was repossessed for non-payment and returned to Royal Brunei Airlines. Whilst airline management provided no reasons for the cessation of international flights, it was believed to be linked to the funding crisis which was being experienced by the state-owned airline.[23][24] After the closure, Tonga was reliant on Air New Zealand, Air Pacific, Air Fiji and Polynesian Airlines for international air services.[25] The cessation of international flights also had the side effect of stranding mail being sent to Tonga in Auckland, up to a month afterwards, due to limited cargo space being available on the Air New Zealand flights to the nation, and in late May it was reported that the nation had not received mail for a week.[26]

Akilisi Pohiva, a pro-democracy member of Tonga's parliament blamed King Taufa'ahau Tupou IV for the financial crisis of the airline, and called on the king to use his own funds to bail Royal Tongan out of its financial woes.[27] He noted that the Tupou had issued a royal decree for the 757 project to proceed, despite opposition from the cabinet and parliament, and claimed that the monarchy is not accountable to the public.[28]

On 18 May 2004, the airline ceased all operations with the remaining one hundred employees losing their jobs, and the islands of Tonga being left without domestic air service. The closure was forced as the airline's only airworthy aircraft, the Shorts 360, broke down and the airline had no funds with which to repair it. Airline administration was hoping that the government would bail it out, but this did not eventuate.[29]

In discussing the sending of Australian and New Zealand specialists to Tonga, to help the government wind up the airline, Phil Goff, the New Zealand Minister of Foreign Affairs stated "lessons can be learned from how and why the RTA collapsed."[30] The Tongan government confirmed that it had a financial commitment in the airline to the value of 14 million Tongan paʻanga, and had pumped some 20 million paʻanga into the airline since its inception in 1985.[30]

In July 2004 PricewaterhouseCoopers found that the only substantial remaining assets of the company were a hangar and the two aircraft. It recommended that the aircraft be repaired and sold.[31] By December 2004, it was reported that creditors had lodged claims of US$8.5 million from the liquidators, but had recovered only US$1.13 million from the sale of assets. PricewaterCoopers also noted that only 106 of 206 former employees of the airline had thus far lodged claims.[32] The Twin Otter was sold in January 2005 for US$850,000, and the sale of assets from the airline's offices in Nukuʻalofa and abroad netted US$71,000 and US$8,000 respectively.[33]

In the absence of domestic flights in Tonga, by June 2004 Air Waves of Vava'u and Fly Niu Airlines had begun operations on some of the former Royal Tongan routes.[34]

airline	Royal Tongan Airlines
iata	WR
icao	HRH
callsign	TONGA ROYAL
founded	1985
ceased	May 18, 2004
hubs	Fuaʻamotu International Airport
fleet size	2
destinations	12
parent	Government of Tonga
headquarters	Royco Building, Nukuʻalofa, Tonga
num employees	100

Royal Tongan Airlines

History

Formative years

International expansion

Towards liquidation

Destinations

Fleet

Former fleet

External links

References