Solomon Airlines struggles highlight regional challenges, aviation expert warns

An aviation expert says smaller Pacific Island carriers need to be flexible in how they operate, as the instability of national airlines has become a regional issue across the Pacific.

Last week, the Solomon Islands prime minister and finance minister called out national carrier Solomon Airlines for being overly reliant on government funding.

Prime Minister Matthew Wale said the airline's problems were no longer hidden in the balance sheet alone.

They are visible to passengers and businesses every day: too few aircraft on domestic routes, unreliable flight schedules, high fares, expensive freight, and services that falls short of public expectations.

"Domestic airfares are too high, freight costs are high, and flight schedules are inconsistent. These are issues that must be addressed," Wale said.

"The airline cannot expect open-ended government funding unless it can show measurable progress."

Finance Minister Gordon Darcy Lilo said Solomon Airlines had been operating at a loss, especially on domestic routes, while international services also remained under pressure.

He urged the board and management to stop thinking in the narrow terms of crisis management and start building a sustainable business model.

"We need partners with deep financial capacity. I agree with the Prime Minister that you must think big and be strategic," Lilo said.

In response, RNZ Pacific received a statement from Solomon Airlines' CEO Matthew Findlay, accepting the criticism as a fair challenge.

Findlay said Wale and Lilo are right to expect more, as that's what the Solomon Islands deserves from its national carrier.

He acknowledged the challenges raised, including domestic losses, international pressure, high airfares, freight costs, and reliability issues.

Findlay said reforming a national airline is complex, especially across a country of more than 1,000 islands, but it is both necessary and overdue.

He said Solomon Airlines accepts the challenge, with a strategic roadmap for its future expected in the coming weeks and months.

Regional airlines face sustainability challenges

Massey University Aviation Lecturer Dr Louis Wu said he is not surprised by the Solomon Islands government's reaction.

"The airline is operating in a very small scale. They only had a couple of aircrafts. I'm not surprised that the airline doesn't make any commercial profits, or they do face a quite serious challenge. How to sustain their business model? How to sustain their airline operations?" said Dr Wu.

In the Pacific, most country-owned airlines provide essential air services, connecting communities separated by water, he says better subsidy transparency could help tame public scrutiny against government funding.

"Most south Pacific island countries, they don't have a kind of regular subsidy scheme. US, they have Essential Air Service program. In the European countries, they have what they call the Public Service Obligation Services scheme. That's why, when people talk about funding, subsiding those airlines, they might trigger a lot of people's debates," Dr Wu said.

He said airlines need to make smart business decisions that align with their market size and capabilities.

"The most important thing is, you need to demonstrate that your business model, your business decisions are reliable. In that sense, people are more likely to accept that, even though you face a lot of challenges, we accept that you know the government need to subsidize you in, because you also run the essential services."

He said big regional airlines like Air New Zealand and Qantas can be flexible with the services they provide, whereas smaller island carriers could be flexible in other ways.

Dr Wu said airlines can earn significant revenue by carrying overseas visitors to South Pacific destinations for tourism.

He said smaller carriers should consider building strong partnerships with local tourism operators, helping them develop a distinct brand identity rather than simply functioning as transport providers.