Air Vanuatu Boss Eyes Takeover Of Tonga’s Only Airline

The Tongan Government is reportedly negotiating to sell its airline, Lulutai, to Flynui, an airline owned by the Chief Executive Officer of Air Vanuatu, Tongan ‘Atu Finau. But the proposed sale, due to be finalised in early 2022, is causing rumblings in Tonga’s capital, Nukuʻalofa.

Tonga’s aviation is set for another shakeout with news Lulutai Airlines is up for sale. Photo: Getty Images

Tongan PM has tentatively agreed to Lulutai’s sale

Multiple media reports suggest the Tongan Government led by Interim Prime Minister Pōhiva Tu’i’onetoa is close to sealing a deal with ‘Atu Finau. Tiny Lulutai Airlines only began operations in September 2020, filling the void left by the Real Tonga collapse earlier that year.

But many locals are concerned about Lulutai passing into private hands after their experience with the last privately owned local carrier, Real Tonga. That airline failed to live up to its promise to provide essential domestic air services around Tonga.

According to Tongan news publication Kaniva News, an e-mail sent by Pōhiva Tu’i’onetoa indicated Flynui could buy Lulutai early next year subject to an assessment of the deal by the Tongan Government.

After the demise of the government-owned Royal Tongan Airlines in 2004, the Tongan Government hasn’t been interested in running airlines, aside from its temporary dalliance with Lulutai – and that’s operating only to provide essential inter-island connectivity.

Lulutai Airlines only began flying in September 2020 in the wake of real Tonga’s collapse. Photo: Lulutai Airlines

Persistence pays off for Flynui founder

Flynui, the prospective new owner of Lulutai, was operating domestic services around Tonga back in 2004. But the Tongan Government enacted a one-airline policy and forced a handful of local airlines out of business, including Flynui.

Since then, Flynui has existed only on paper, and its founder has gone on to bigger and better things. But if local boy made good, ‘Atu Finau, pulls off this deal, it will mark a triumphant return home for him.

In December 2020, ‘Atu Finau picked up a gig running Air Vanuatu. The Port Vila-based airline faced a near-death experience shortly after his arrival. In March this year, Vanuatu’s Government took control of the airline to save it from bankruptcy. However, ‘Atu Finau managed to keep his job as Chief Executive Officer.

Air Vanuatu was crippled by debt and an agreement to purchase Airbus A220 aircraft, a plane one Vanuatu Government Minister described as “not fit for purpose in the region.” But in more recent months, Air Vanuatu under ‘Atu Finau has regrouped and is now on a sounder financial footing.

Taking over Lulutai Airlines could shape up as a neat piece of expansion for Air Vanuatu. Photo: Airbus

Whatever happens, Tonga needs an airline

Small Pacific island nations like Vanuatu and Tonga aren’t one island but a series of scattered islands. Most are uninhabited, but those that are inhabited need air connectivity, even if it is just a twice-weekly Twin Otter service.

After the Real Tonga debacle, the pressure to maintain domestic air connectivity around Tonga’s main islands is acute. At the moment, there is a lack of detail surrounding the Lulutai sale, and that’s fanning speculation and rumor. However, Flyniu has confirmed it will be based at Tonga’s primary airport, Vavaʻu International Airport.

What’s unknown is whether the Flynui services will be a stand-alone airline or a subsidiary of Air Vanuatu or be absorbed into Air Vanuatu. If the latter options pan out, that’s a nice piece of Pacific airline empire building from Air Vanuatu.

And while the Tongan Government may not be thrilled about the prospects of a foreign operator providing a key piece of transport infrastructure, the fact that a Tongan helms that foreign airline may help smooth the path.