A storm has been brewing in the Pacific, as the post COVID-19 lockdown resumption fares being charged by Air Calédonie (TY, Nouméa Magenta) were called into question last week by the local residents and media.

In response, the airline has been fully transparent on its pricing regime, detailing how it determines its rates in its relevant fare buckets on its website on May 18. It said that it "deplores the erroneous messages conveyed around its action" and that it "is constantly seeking a financial balance which is always precarious." Air Calédonie also stated that its objective was "to ensure the sustainability of a vital activity for the territory."

The cause of the upset was a XPF350 CFP franc (USD3.17) one-way surcharge which was implemented by the airline since its resumed operations on May 4. In a press release issued by the carrier, it insists that its duration is temporary and it "will be removed as soon as the new price schedule that the company has filed with the government is approved."

Air Calédonie blames the need for the surcharge on the six-week suspension of its flights which generated a loss of more than XPF400 million (USD3.63 million). While its flights have resumed, "traffic is half less than before the crisis," and by the end of the year, it has calculated that XPF1 billion (USD9.07 million) will have been lost from its annual revenues. It also added that its traffic would take around three years to fully recover to 2019 levels.

The surcharge is also necessary despite the financial measures that the carrier has been taking to preserve liquidity - namely deferring bank, fiscal and social payments, as well as seeking a government-backed loan, partial unemployment for around 75% of its workforce, and voluntary redundancies. The objective is to reduce the airline's payroll by 20% and overheads by 10%.

As a result of the fare surcharge, the New Caledonian airports of Lifou and Maré have been blocked by chiefs of the Wetr district, its traditional leaders, in protest at Air Calédonie raising its fares. The airline stated on the matter: "Following the blocking of Wanaham and La Roche airports, all rotations with Lifou and Maré are cancelled until further notice."