Cooks Islands Prime Minister Mark Brown has defended his government’s decision not to provide concessions for businessman Mike Pero’s proposed airlines venture.
Mr Brown said he was “surprised” and “very disappointed” by a Cook Islands News story last week that Pero pulled the plug on Pasifika Air because he couldn’t get enough concessions on landing fees at the international airport.
Mr Pero claimed that the opening of his airlines service from New Zealand to the Cook Islands had been cancelled because of the lack of support from the Cook Islands government.
But Mr Brown hit back, saying his government did not invest in any initiatives be they start-ups or existing, without proper analysis and well-developed financials.
“The Government will invest in smart business which has in our own analysis had real likelihood of success, not failure,” said Brown.
“Whatever support the Cook Islands Government provided one airline through financial subsidies, it must provide all airlines to ensure a level playing field.
He said increased competition in the future once visitor arrivals are more consistent would be useful if it resulted in reduced ticket prices and more visitors.
Real estate millionaire developer Mr Pero said the government had agreed to waive landing fees for just the first month of operation, compared to two years for the New Zealand airports.
He has grounded his Cook Islands airline plans permanently informing ‘Stuff NZ’ that Pasifika Air will not be providing an air link between the Cook Islands, Christchurch and Wellington as originally planned.
Pasifika Air was originally planned to fly later this year as part of a New Zealand-Cook Islands travel bubble.
Mr Brown said Mr Pero had been in discussion with Cook Islands government agencies, including the Airport Authority and Ministry of Finance and Economic Management and had asked for a landing fee exemption of one to two years.
But the Authority agreed instead to one-month exemption, 50 per cent discount on the second month, 25 per cent off the third with full landing fees applying from the fourth month onwards.
“The current landing fee for flights ex NZ is $1800 per flight – less than $10 per passenger,” the PM said.
For his part, Mr Pero said it was customary to make some concessions, especially in the first year to assist a new service to get started, claiming that Air New Zealand paid little in the way of fees when they started flying to the Cook Islands, while Virgin (and Pacific Blue, prior) got start-up concessions.
“I think the wrong decision was made here,” Pero said.