Samoa Airways accumulated loss when the FAST government took office was over 100 million tala.
This was announced by the Minister of Public Enterprises, which oversees the Airline, Leatinuu Wayne Leatinuu in Parliament yesterday.
This follows claims by HRPP leader, Fonotoe Lauolo Pierre, the government should have never cancelled the airline’s lease. Otherwise, the airline would have been able to pay back its debts, with travel restrictions lifted. Leatinu’u said the aircraft leased by the airline, was stuck in Australia, yet Samoa Airways debts continued to mount.
The Minister said there was no way the government would continue the airline’s lease when the airline was operating at a loss. Leatinuu noted that the opposition might continue operating at a loss, not the government.
They cannot invest money into a project when it’s a loss cause, said Leatinuu. Last year the government of Samoa agreed to pay $16 million tala to fly Aircraft Holdings Eighteen Ltd, an SPV for Carlyle Aviation Partners, for the cancellation of a B737-800 dry lease for Samoa Airways Minister of Public Enterprises Leatinu’u Wayne So’oialo told the Parliament.
CH Aviation says Leatinu’u underlined the lessor initially demanded WST160 million (USD59 million), but the government managed to negotiate a settlement down to just 10% of the initial ask.
2-WTFL (msn 42805) was signed as Samoa Airways’ first in-house narrowbody aircraft by the previous government in mid-2021.
The current administration then offered to review the deal immediately after taking power and declared that Samoa Airways would not be adding the B737 due to high induction and operating costs. The jet was delivered to Brisbane Int’l for final maintenance in July 2021 and was registered in Samoa but never arrived at Apia Faleolo. It was ultimately deregistered in March 2022 and ferried back to Montpellier for storage.
The parliament approved a $6 million (USD2.2 million) subsidy to the airline to cover its loss this financial year.
Leatinu’u also outlined the government’s plans to audit and turn around the loss-making flag carrier. The state appointed a new interim airline board, comprising Tupuola Koki Tuala, Fauo’o Fatu Tielu, and Taimalie Charlie Ah Liki. Leatinu’u also indicated that Samoa Airways’ financial accounts had not been properly audited since 2009.
The minister rebuked the opposition’s criticism that the lack of Samoa Airways’ narrowbody capacity led foreign airlines to exploit the market through higher fares.
Leatinu’u emphasised that the government was committed to making Samoa Airways financially sustainable rather than using it to undercut larger airlines. He indicated that Samoa Airways would launch its international routes as we advance but did not commit to a timeline.
