Opinion

Open Skies: TO ACHIEVE AN EVEN BRIGHTER ECONOMIC PICTURE?

Having spent four years with the national airline, Fiji Airways (formerly known as Air Pacific), I can truly share that it has been a wonderful chapter in my life, especially
17 Nov 2015 09:41
Open Skies: TO ACHIEVE AN EVEN BRIGHTER ECONOMIC PICTURE?
josaia rayawa

Having spent four years with the national airline, Fiji Airways (formerly known as Air Pacific), I can truly share that it has been a wonderful chapter in my life, especially with the relationships that I have forged there.
Professionally speaking, there are some amazing people there who still ‘wear their hearts on their sleeves’. We were groomed to support the idea of protecting the national airline.
All of the great reasons about sustaining and supporting the national airline, many of us took it on as a call of duty. Personally, I still stand by the idea of supporting the national airline; however I can’t help wondering about the economic potential that also lies behind the idea of an open skies policy.
But there is something about this subject that I would like our Government to pursue a study into and to share with the rest of us on the outcome.

Protectionism vs Open skies policy
There are many arguments about protectionism policy versus open skies policy. Wikipedia explains this policy as “an international policy concept that calls for the liberalisation of the rules and regulations of the international aviation industry—especially commercial aviation—in order to create a free-market environment for the airline industry. The primary objectives to liberalise the rules for international aviation markets and minimise government intervention as it applies to passenger, all-cargo, and combination air transportation as well as scheduled and charter services”.
In the case of protectionism, it simply defines it as “government actions and policies that restrict or restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition.” Nothing wrong with that, I guess. Any government undertaking it for the reasons of protecting the local economy has my vote.
So consider what I am sharing here as part of one citizen’s contribution to nation-building thoughts.
The idea of protecting our national airline is not being questioned here. What ought to be considered here is addressing the idea of continuing such a protection of our national airline, but through an open skies policy. I know it sounds ludicrous but, perhaps, it is because we have not given it the opportunity to be addressed in an open and meaningful dialogue.
I have enjoyed working under the leadership of three CEOs during my time at Air Pacific and then Fiji Airways and I have a lot of respect for their individual contribution, but.
I wonder if their best has ever been truly put to the test, given the level of protectionism extended to the airline. The very best, I believe, of any leader can be truly and fully realised in an open skies environment.

Telecommunications example
I want to use a local example to help bring this thought closer. The telecommunications industry is a classic case. When Vodafone entered and controlled the market, they enjoyed a period of ‘power’ so to speak, a profitable position, I might add. Now, it is not impossible for anyone at Vodafone to entertain the idea that it can’t get better than this, especially without any major competition to worry about.
Enter Digicel into the industry. Expecting that it might have a detrimental effect on the Vodafone business, the impact was quite the opposite. Vodafone’s business has since grown eight to ten-fold from a time with a 120,000 clientele base in a non-competitive environment, to now enjoying more than 750,000 clientele base in a very competitive setting. Kudos to the leadership style and commitment to make a difference that existed then in Vodafone and even more so with the team today. Due thanks must also go to Digicel for their visionary commitment to enter a market area such as Fiji. I am sure they are also enjoying a good profitable business.
The point being that this was a direct result of competition arriving into their industry. Competition brings out the best & the most creative in all, depending on the mettle of the leadership.

Factors in play
So what about the airline industry? Sure, one could argue that it is a totally different industry and that there are alot more factors beyond Fiji’s control that is in play.
What are some of these factors? One could argue about the general fluctuations of fuel pricing (that rises and falls at the whim of international oil countries), affecting airline operations and ultimately ticket pricings.
So when fuel prices go up, there are fuel surcharges applied. When fuel prices drop, airline prices ought to drop as well. Sometime they don’t necessarily, for other varying reasons, but that is a commercial strategy understood in this industry.
There are also economic market changes in major countries whose travel habits can affect reasons for travel to Fiji. Some, because of high pricing reasons, but for many, it can also be about the personal relevance of the destination to them. This is why strong brand messaging is critical to ensure our relevance as a destination remains ‘top of mind’ to the potential traveler.
As real as some of the arguments are, about these industries, being different and with their own unique challenges, the principle of life and business in general applies to all.

Potential advantages
If protectionism has helped in producing $60million profit for the national airline, for the government and the nation, can you imagine what an open skies policy could produce for the government and the nation? It could double, triple or even be ten-fold. I can only guestimate. Maldives is an ideal example of what open skies policy can do. The economic potential that other airlines would bring to Fiji is a market base that the national airline couldn’t handle on its own, even if it tried. Better still, these airlines will bring visitors to our shores at their own cost. The national airline must be allowed to play its role effectively as a fully fledged commercial airline and ‘play their cards’ on the world stage.
I think some economists treat open skies policy as a policy to undermine the national airline, when it is clearly not. The thinking cannot just be about getting the national airline strong, so the rest of the country can be strong. We have it back to front, at least in my humble opinion. It’s about finding the ways to strengthen the nation first.
A managed open skies policy will no doubt have a greater impact on the country’s Number One industry, tourism.
The Government’s policies on tourism, trade and investment will thrive effectively, especially, with the great potential of investment ‘materialising’, because of such a policy. Current resort/hotel average occupancies would lift to a healthier growth right across the country through a more regularised travel coming in as opposed to the seasonal travel currently experienced in the country. This will mean more revenue, for all Government statutory bodies as in AFL, Tourism Fiji, and Film Fiji to name a few.
Furthermore, an open skies policy, without a doubt, will create a stronger private sector base which would translate to a healthier tax base for Government.
Therefore, Government’s rightful concerns for its investment in the national airline can become lesser of a burden. Why? Well, because the whole country’s economic base will have now provided the government a stronger economic position and ultimately be in a position to strengthen their ability to pay off the investment/and or loan quicker in Fiji Airways.

Could be more marketable
The airline as a fully fledged commercial airline can then go out there and fully test its capabilities. The international market experience of the executive team can be put to the test where their skills and creative solutions can be sought to generate for the airline a whole new dimension of specialised market brand repositioning for strong revenue streams. Their vision to become a top boutique airline can be realised in a more competitive setting, and the creative strategies and tactical thinking of the team will be the true test of their mettle, keeping our airline, a relevant choice.
After all, this is why we have sought the best available from outside to come and run the airline company. This is where the Government and the nation can really get their money’s worth in their investment in such international expertise.
If they can’t produce, then fire them and find the people who can. An open skies policy, at least, will give Fiji, the strong economic base to attract the best to run its airline. However, I like to think there is more than enough brain power in our current airline team to create a strong, reliable and successful brand that can stand on its own in an open skies environment. The new CEO of Fiji Airways sounds like a very exciting and innovative individual. I hope that the new CEO will be given that opportunity to be tested accordingly in such an environment. I wish him well, both for his sake and ours.
As the country’s number one industry, tourism’s economic strength cannot be put into one basket so to speak, where everything supposedly lies in the survival of the national airline when in actual fact, the focus ought to be in the growth of the economy in its entirety. It’s too much of a responsibility to be placed on an airline to be shouldered with the responsibility to carry the tourism economy for us, all.

‘Ideas outside the box’
We all want to help build this nation through the strong and innovative vision being purported by government – but it must be a vision with a real step change. It also means that leaders in both government and private sector must acknowledge a willingness to consider and pursue more dialogue on ideas that a friend of mine, Victor Sharan would say, “ideas outside the box”. These decisions require intense dialogue and study and at the end of the day, it’s not about who takes the credit for it. It is about leaving a legacy for our next generation. Will the next generation write our history and say, “Yes, the leaders of 2016 were truly wise” or will they say, otherwise. That must be our motivation.
There is also the need for us to ask ourselves as to what kind of tourism we want in 10 or 20 years time.
The Prime Minister’s call for a sustainable environment is equally important for us all to keep in mind; however it is not impossible to engage a booming tourism industry to be equally responsible in their efforts to ensure both a sustainable environment and a profitable state.
We can’t leave it all to Government. It is up to all of us to determine well, how we manage our resources and enable millions of visitors to come enjoy God’s blessings on this nation. This is not an impossible task. .
I am encouraged by St Peter’s first letter calling attention to positive aspects of having one’s faith tested.
The trials that come with it, tests the quality of our faith as a nation, as leaders and as individuals.
All that I have seen about what has taken place in Fiji is close to a refining process and the fact that these refining processes may reveal weaknesses in our faith can also be beneficial if we thus see the need to take corrective measures. We can begin with some open and meaningful dialogue.

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