Policy on domestic air operations [1]
Friday, September 10, 2004 - 16:15. Updated on Wednesday, May 7, 2014 - 10:22.
Government of the Kingdom of Tonga
Policy on Domestic Operations
Preamble:
Whereas the Government of the Kingdom of Tonga recognising the importance of a sustained safe and secure domestic air transport system as a catalyst and essential service for the socio economic development of the peoples of the Kingdom of Tonga; and
Whereas the Government of the Kingdom of Tonga realising the limited financial and human resources with appropriate technical capabilities in aviation and the limited market size to sustain economic operations based on free market forces;
Therefore have approved that only one operator will be licensed for the provision of scheduled air transport services within the Kingdom.
Policy:
1. The Ministry of Civil Aviation shall be responsible for the issuance of safety and economic approval for all air transport operations within the Kingdom;
2. Safety and Security Conventions and associated legislation shall be paramount in the consideration and assessment of applications for domestic operations;
3. That for a period of 24 months from the date of effect of this policy only one operator will be approved to provide scheduled domestic air services within the Kingdom;
4. That selection of the single operator will be based upon a competitive, transparent and even handed manner based upon the criteria detailed in schedule 1 to this policy; and
5. That short term non-scheduled charter operations will be considered by the Ministry of Civil Aviation based upon the needs of the market, due to unforeseen traffic demands and the inability of the approved scheduled operator, providing the service.
by Approval of Privy Council
30th July, 2004
Schedule 1
Determination of a Single Operator for the Provision of Scheduled Air Transport Services within the Kingdom of Tonga Ministerial Advisory Committee
A committee to be known as the Ministerial Advisory Committee (MAC) comprising the following representation of the following Ministries, Ministry of Civil Aviation, Central Planning Department and Ministry of Finance, will be formed for the purpose of assessing applications for a single domestic scheduled service provider.
The MAC will provide a recommendation of a single operator to the Minister for Civil Aviation based upon assessment of the following criteria:
Route Structure - Preference will be given to the operator providing services to all of the Kingdoms airports;
Preference will also be given to route structures and schedules that best meet the needs for inter island travel.
Frequency of Operations - The following level of service must be provided for as a minimum:
X3 services to Vava‘u - Ha‘apai (daily);
X2 services to Niuafo‘ou - Niuatoputapu (weekly);
X2 services ‘Eua (daily).
Capacity - The ability to meet the tourism and air freight demands of the outer island developments.
Business Plan - The selected operator will have a well-developed business plan that establishes clear objectives for the venture. These objectives will be aligned with the public interest in terms of maintaining and developing the civil aviation sector in Tonga and promoting economic and social development. The business plan will show how the venture will be organized to deliver the required services and will establish what financial, physical and human resources will be provided.
Ownership - Preference will be given to Tongan people. The chosen operator will demonstrate in its business plan that it has a prudent mix of equity investment in addition to any debt, particularly having regard to any reliance on leasing of aircraft and the on-going financial commitments thereby implied.
Capital Investment -The operator's business plan will demonstrate how required assets (equipment and buildings) will be provided and financed.
Safety Certification - The single operator will be required to undergo full safety certification and receive a Tongan Air Operator Certificate in accordance with the Tongan Civil Aviation Act and Tongan Civil Aviation Regulations (within 6 months of selection);
Aircraft will also be required to be placed upon the Tongan Civil Aircraft Register (within 6 months of operations within the Kingdom).
Quality Control -The operator will demonstrate in the business plan that it will have adequate management information systems and processes to support continuing quality control systems, especially in the area of flight safety and maintenance.
Insurance -The operator will maintain adequate insurance coverage consistent with industry standards and in order to meet obligations under international Treaties.
Market Study and Analysis -The operator's business plan will demonstrate a sound knowledge of the requirements of inter-island travel based on market research and analysis. The operator will also be expected to have a continuing focus on the needs of travellers. The operator will be required to collect and report traffic statistics on a regular basis.
Proposed Fare Structure -All fares will be capped by the last approved fare structure of Royal Tongan Airlines;
Increase in fares will require prior approval by the MCA and will require the operator to provide substantial economic justification;
Preference will be given to the operator who is able to substantially reduce existing domestic fares and maintains a focus on productivity improvements that benefit travellers and shippers.
Domestic Aviation Development -Preference will be given to provision of services to places currently not serviced, like amphibious operations, and to a willingness to forge partnerships to promote tourism and economic development.