Minister explains Samoa Airways $104m losses and $85m debts

By Lagi Keresoma

APIA, SAMOA – 29 JUNE 2023: The Minister of Samoa Airways has informed Parliament that the national carrier has recorded a $104 million loss between 2018 and 2022.

Leatinu’u Wayne Sooialo gave a detailed rundown of the company’s financial losses.

• 2018 – $14 million

• 2019 – $26 million

• 2020 – $34 million

• 2021 – $3 million

• 2022 – $27 million

When the FAST Government took office in late July 2021, the previous Government had secured a deal with a Dutch company to lease a Boeing 737-800 to resume jet services. The aircraft however never landed in Samoa as it failed to acquire a license to fly due to safety issues.

Based on Samoa Airways financial record and the recommendation of a Cabinet Special Committee that reviewed the deal, the Government decided to cancel.

Moreover, in December 2021, Samoa closed its borders due to COVID-19.

Negotiations to return the aircraft still parked in Australia ended up with the Government paying US$5.3m or ST$14.6m to the company to end the deal.

Jet operations debt at $85m        
To fund the jet services and operations, the company also piled up a debt of $85m which consisted of $55m loaned from the Unit Trust of Samoa (UTOS) and guaranteed by the government.

$55m has been paid and the Company is working on ways to pay the balance of $25.3m according to the Minister.

Open Skies policy – No rush to resume jet services
He also informed Parliament that the Government has no intention of rushing to resume international jet services “incase we fall into the debt pit as we’ve been through.”

Leatinu’u believes that the current flights between Samoa, New Zealand, Australia and Fiji are sufficient to bring people to Samoa, let alone the resumption of Virgin Australia’s two weekly flights to Samoa.

“I am happy to say that since the cancellation of the deal 9 months ago, the company has saved $4m as of March 2023,” said Leatinu’u.

According to Leatinu’u this was possible through the service provided by the small aircrafts serving the Samoa and American Samoa passengers and cargo service.

Opposition leader Lauofo Pierre Lauofo wanted to know how soon the Government would secure another airline to fly between Samoa and Auckland as only one airline is catering for the route and it is very expensive.

He also wanted to know if the Government was looking at the Open Skies Policy which he said will not cost the Government anything.

The Minister of Civil Aviation, Olo Fiti Vaai said a major Chinese Airline has applied to fly scheduled commercial flights to Samoa.

The Minister for Civil Aviation, Olo Fiti Vaai clarified that yes there is the Open Skies Policy, but no airline companies want to fly to Samoa.

He said when the FAST Government came to power, there were only two airlines flying this route to Samoa. Then it was blocked by a certain group “but now it’s just opened up and we are waiting on a response from interested airlines.”

Later, the Minister of Civil Aviation, Olo Fiti Vaai explained that his Ministry is processing an application from a major Chinese airline that recently flew in tourists direct from China, for a license to have scheduled commercial flights to Samoa.

Olo said, the company has submitted details of ten of their aircrafts so that they can be registered to fly to Samoa if their license is approved.