Real estate identity Mike Pero is parkingplans to launch Pasifika Air which he had hoped would be part of a two-way travel bubble with the Cook Islands.
He had planned to lease Boeing 737 planes and link Wellington and Christchurch with Rarotonga.
But continued uncertainty over the timing of quarantine-free travel between New Zealand and the Cook Islands and the cost of committing to aircraft leases have forced him to shelve plans.
Pero, who is to star as the judge in the New Zealand version of The Apprentice, said he had sunk big money into the venture.
”My personal costs to date amount to several hundred thousand dollars, and, thankfully, not millions,” Pero said.
”I came into this in 2020 knowing there would be challenges, but the one that continually hounds us in our decision making is the seeming reluctance to open up travel to the Cook Islands and other Pacific nations.”
The New Zealand Government has said that it hopes to open a two-way bubble some time in May.Cook Islanders can come here quarantine-free.
”The Cooks have never had Covid-19 and there is still no border reopening date, yet the travel bubble with Australia is about to open.Amid this continuing uncertainty, I have reluctantly decided now is not the time to launch Pasifika Air.”
Pero, a commercial pilot who has been involved in airlines before, said that for a new carrier there was usually a minimum three- to four-month time frame from any commitment to lease an aircraft to its actual delivery date.
The fallout from the Covid-19 pandemic on the airline industry has blown out such timelines.
Pero had earlier this year talked about leasing a Virgin Australia Boeing 737 aircraft.
”While there is no shortage of these aircraft on the ground, there are few that can be made airworthy in the time frame we need once a border reopening date is confirmed.”
The global downturn in the aviation industry has led to a shortage of, and delays in, engineering slots being available for recommissioning these aircraft from storage.
Pero said Air New Zealand’s engineering services division was no longer in a position to provide maintenance services to other airlines,another setback.
”Aside from a passion for aviation and the desire to launch an airline, my primary motivation has always been to help the Cook Islands people, who are also New Zealand citizens.”
The Cooks have been losing many millions of dollars a week in tourist income for the past 12 months.
As well as revenue, the Islands have also been steadily losing workers as younger people have been forced to move to New Zealand to find work to support their families back home.
He said Pasifika was 80 per cent through the complex task of completing documentation, manuals and paperwork for its Air Operator’s Certificate (AOC).
”The certification process was a major and critical part of the launch schedule and we were on a good timeline for a mid-year sign-off.Nevertheless, it is difficult to negotiate with aircraft lease companies when you have no certainty on border reopening dates.”
Even now the local and global rollout of vaccines has created further uncertainty.
To commit $3 million to $5m in deposits and insurance to have two-to-three aircraft sitting on the tarmac made no commercial sense.
”We have been offered some very attractive propositions over the past six months but I am not prepared to commit to $60 million worth of aircraft and a five-10 year lease when there is so much uncertainty.”
Pero said the most disappointing part for him was the number of airline people who could have been re-engaged in the industry.
”I believe we could have immediately re-employed between 30 and 60 skilled people, including pilots, cabin crew, engineers, sales agents, marketing and airport workers.”
While the Cook Islands have been shelved, Pero said he was in advanced discussions to provide services to Samoa and Vanuatu.
He was 75 per cent towards funding the multi-million dollar start up costs for the airline.
A ”number” of investors had come forward and he said he looked forward to working with them on other ventures.
”As we park the airline for now, all staff and contractors will be paid and all commitments will be honoured.The company and its funds remain fully intact and we will progress our AOC to a point where we can be ready to reignite,” Pero said.
”I am touched by the well-wishers and the support I received from both the public and airline industry, CAA, the airports, and literally hundreds of complete strangers as we worked on the Pasifika Air project.”
Pasifika Air always faced big obstacles, which Pero who has dual residency in New Zealand and the Cook Islands had acknowledged.
His first job as a commercial pilot was with Pacifica Air, flying between Christchurch and Wanaka.
That airline suspended services in 1989, hit by competition from a bigger rival and high charges.
Pero also flew for Mt Cook Airline, and was on the list for an interview at Air New Zealand, but reportedly missed out when the company hit turbulence and laid off staff.
He was also involved in and lost a “significant amount of money” with Origin Pacific Airways, which ceased flying in 2006.
With his Cook Island venture, Pero faced the prospect of Air New Zealand deploying aircraft on to the routes he was flying and was up against the formidable Airpoints scheme where customers could use them on the services.
Air New Zealand customers have hundreds of millions of dollars in credit and will be looking for flights to use them.
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