Tongan Government Plans Lulutai Airlines Overhaul for Sale
The Tongan government plans to restructure state-owned Lulutai Airlines in preparation for a potential sale, according to Minister of Public Enterprises Piveni Piukala. To make the airline marketable, the government says it must first address the airline’s mounting debt and operational issues.
Piukala told Kaniva Tonga that Lulutai owes TOP6 million (USD2.5 million) to the State Retirement Fund. He warned that without significant changes, the loan will likely go unpaid. The government has also injected TOP15 million (USD6.3 million) into the airline since its launch in late 2020, yet Lulutai has consistently operated at a loss.
The minister emphasized that financial recovery and improved reliability are essential if the airline is to be made viable for sale. However, he did not disclose any potential buyers or timeline for privatization.
Lulutai Airlines is Tonga’s only scheduled domestic carrier, connecting Tongatapu with Eua, Ha’apai, and Vava’u. The airline’s operational challenges have included ongoing aircraft reliability issues. Its fleet currently includes one active DHC-6-300 Twin Otter, while its Saab 340B(Plus) and Y12 remain grounded.
To maintain service, Lulutai is damp-leasing a Saab 340B from New Zealand-based Air Chathams, which has filled the gap caused by the inoperable aircraft.
The government’s goal is to stabilize the airline’s operations and finances to recover its investment and attract private interest. For now, Lulutai’s future hinges on its ability to restore service reliability and reduce debt.
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Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com