Our Greatest Challenge Yet - an open letter from our CEO
Posted on October 20, 2020 at 05:00 PM in General News
Dearest Friends and Partners,
As you are a valued partner of Solomon Airlines, I owe you an update on the current status of Solomon Airlines, as we strive to endure the on-going impact of the Covid-19 pandemic. As we all know business has cycles and we were prepared for a slower rate of growth in 2020 but like all airlines, we did not expect the devastating travel restrictions imposed by Governments and the consequent collapse of the travel industry.
On March 7, 2020, we welcomed ‘Spirit of Solomons’ our new Airbus A320 international aircraft. It was a day of celebration after nearly a year of searching for the right aircraft. We have had several years of progress culminating in a 7 % growth in tourists flown last year. Yet even as our new international aircraft touched down in Honiara, the devastating impact of Covid-19 was beginning to unfold in all world markets.
The reopening of Munda Airport as an international gateway to the Western Province in March 2019, the refurbishment of our Twin Otter domestic fleet, and the change to a more modern version of our reservations system were significant milestones achieved under our strategic plan.
Positive progress also occurred among local tourism operators, many having qualified for interest-free loans to develop facilities and upgrade their accommodation. This financial support came via the Solomon Islands Tourism Infrastructure Development Fund (SITIDF), an initiative driven by Solomon Airlines with funding largely provided by the New Zealand Government.
As the pandemic intensified, the Solomon Islands Government acted swiftly and decisively to close our international borders. Solomon Airlines ceased all scheduled international flights to Australia, Fiji, Vanuatu, and Kiribati and with fewer arrivals and a slowing domestic economy, we scaled back domestic operations considerably. We also implemented a wide range of cost-cutting measures and vigorously pursued acceptable international charters and domestic tourism initiatives to continue our operations.
Our new A320 began flying a weekly cargo flight between Brisbane and Honiara as well as operating very limited and strictly controlled repatriation flights to bring people home to Solomon Islands. These initiatives have brought us a trickle of revenue.
To help our local tourism industry survive, we introduced a domestic tourism initiative ‘Helpful Holidays’. This initiative has created patronage for local tourism operators and help them to keep functioning. At the request of the New Zealand Government, the excess funds remaining in the SITIDF, intended to advance new local tourism initiatives, are now being provided as grant monies in another effort to sustain the survival of our existing operators.
We are continuing approved repatriation flights and charters as well as constantly reviewing our current finances and potential future operations. However the truth simply is, that with over 60% of the Company’s revenue vanishing overnight and fixed costs remaining, there is a problem – and the daily reality for Solomon Airlines is now a case of survival, a dire situation which has required some drastic action.
Regrettably, with operations severely reduced, we ultimately had no choice but to reduce our workforce through retrenchments to match the requirements of what will be a smaller airline for some time to come. We are now operating with a smaller workforce on reduced pay, and some staff are working on a job rotation basis – month on, month off to share available work, and remain ready for an increase in business.
At this juncture, like airlines everywhere, Solomon Airlines has minimal cash reserves, and we are indebted to those we owe money to and are deeply grateful to have very good working relationships with our suppliers and creditors who are working with us to keep us in business.
The future is unclear and our survival depends upon Government support and the intermittent revenue we raise as we wait to reopen Solomon Islands borders and begin regular operations again.
However, what is clear, is the need to preserve Solomon Islands national carrier.
For an archipelago nation dependent upon international air access, it is vital to ensure the survival of the national carrier. Solomon Airlines is critical to economic recovery, and to future economic development. We are also an instrument of government, capable of providing essential domestic and international services in times of crisis or emergency.
Without a national airline, there would be limited control over air access to, from, and within the Solomon Islands. There would be limited control over air travel and cargo pricing and scheduling, no easy medical travel, airmail or express cargo. Without a national airline, there would be a permanent loss of locally-based aviation, tourism, and skilled jobs.
Foreign operators, though they may come and go, also take their earnings with them - out of the country.
Solomon Airlines is the only airline that has invested in tourism in the Solomon Islands. We led the establishment of the Solomon Islands Tourism Infrastructure Development Fund, now sustaining local operators despite the depleting funds. We strive to arrange travel tourism-friendly schedules, to participate in international destination marketing activities, and to create local tourism initiatives such as Helpful Holidays.
We can still see an exciting, valuable future tourism development for the Solomon Islands and that requires a national carrier. Aviation and Tourism must work hand in hand as we navigate an era that will require further endurance, extra care, gradual restoration, promotion and protection of air services, and travel opportunities to, from, and within the Solomon Islands.
I would like to take this opportunity to thank the many people and organisations walking this rocky road with us, for their resilience and confidence in our future recovery, as we endure these unprecedented circumstances.
Chief Executive Officer, Solomon Airlines
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