The Prime Minister of Samoa, Tuilaepa Sailele Malielegaoi, says that a joint venture with Virgin Samoa (Apia Faleolo) will end on December 5 this year, reports Samoa Observer.
"Following numerous extensive discussions and negotiations held between V.A. and the Committee members of the Special Negotiating Team ("S.N.T."), Cabinet has unanimously decided not to re-new the Joint Venture ("JV")," Tuilaepa said in a letter seen by the Observer.
The joint venture between the government and Virgin Blue Holdings was signed in 2005, with both the government and Virgin Australia (VA, Brisbane International) each taking a 49% stake. The remaining 2% is held independently. Under the JV, the Samoan carrier was rebranded from Polynesian Airlines to Polynesian Blue, and later to Virgin Samoa.
The Prime Minister had previously expressed his displeasure at the returns the government has received from the joint venture as well as a lack of control over operations. Virgin Australia paid a dividend of AUD3 million (USD2.25 million) to the government of Samoa on November 30, 2016, but Tuilaepa said that it was "not enough". He also said that the country is now ready to have its own airline again.
"When you own your own airline, you can make your own polices about your airline which will reflect the policies of our country," he is quoted as saying.
A report seen by the Observer, "Scoping and Feasibility Study of International Jet Operations for Samoa in 2016", spells this out more clearly saying that Virgin Australia had "total control of the operation of the JV through the management and commercial services agreements including setting of fare, capacity and frequency levels", while also leaving the government liable for losses on unprofitable routes. Communication between the stakeholders had also suffered due to Virgin's consolidation of its administrative operations to Australia.
"Since the change in management at Virgin Australia, the pull back of administration from New Zealand to Virgin Australia Head Office and adjustments from low costs to a hybrid business model that level of contact has reduced significantly," the report says.
According to ch-aviation schedules data, Virgin Samoa operates from Apia Faleolo on a 6x weekly service to Auckland International, 2x weekly to Sydney Kingsford Smith, and 1x weekly to Brisbane International.
