By Katalina Siasau

Former Lulutai directors, Hon. Hu'akavameiliku and Hon. Samiu Vaipulu with another member of parliament, Hon. Sevenitini Toumo'ua have pushed back on issues raised by the new government regarding the viability of the domestic carrier, Lulutai Airlines, which is owned by the Government and the Retirement Fund Board.

At a media briefing yesterday, 10 March, at the Parliament's conference room, in Nuku’alofa, the former Prime Minster, debated the financial position of the airline which has been questioned by the new government.

Hon. Hu’akavameiliku (Siaosi Sovaleni) said the loan from the Retirement Fund Board, including interest, was initially $6 million.

He noted that about $800,000 of the Lulutai debt had been repaid to the Retirement Fund.

“Lulutai has only one debt from the Retirement Fund, and $5.7 million principal and interest is the amount left.”

 He expressed confidence that Lulutai “has sufficient assets to cover its debt.”

The former Prime Minister is the former chairman of the board of the Lulutai Airlines and was a director for three years. 

After the new government took over the running of the airline, recently appointing [2] a new temporary CEO, concern was expressed that the airline's assets did not hold enough value to cover its loans, and could not protect the Retirement Fund Board investment in the airline.

The new Prime Minister Hon. Aisake Eke, who has taken over the chairmanship of the Lulutai Airlines Board, is also the chairman of the board of the National Retirement Fund, which has a shareholding in Lulutai Airlines.

Hon. Dr Eke recently stated that no work had been done to bring the airline under the public enterprises, and that no annual reports on the Lulutai operations had been submitted to Parliament or the Ministry of Public Enterprises.

Lulutai to become Public Enterprise

Although the Lulutai Airlines is a government-owned company it does not come under the oversight of the Public Enterprises Board.

Hu’akavameiliku’s government approved for it to become a public enterprise on 7 November last year. The decision followed public concerns on the operation of the airlines, as well as King Tupou VI questioning the previous government's secrecy in operating the airline.

Yesterday, Hu’akavameiliku said they were currently, "checking its legal aspect whether or not it is required to be submitted to the House for amendment."

$7 million from Gov’t

During a media briefing last month, the Minister for Public Enterprises, Hon. Piveni Piukala said that Lulutai required a $7 million input from the Government to revive its operations.

Yesterday, Hu’akavameiliku said the $7 million was a proposed loan, and that Lulutai was not asking for a government grant.

He noted that Lulutai's gearing ratio is “currently less than 0.5”..., "indicating a significant amount of equity available to cover Lulutai's liabilities, including loans and creditor repayments."

According to the Tonga Business Registry, the Retirement Fund Board currently owns 27.19% of Lulutai's shares.

Saab 340 insurance

Hu’akavameiliku stated that although the insurance company had offered a settlement for the damage to the Lulutai’s leased Saab 340 aircraft, “negotiations are ongoing because both the leasing company and Lulutai believe the offered amount should be reevaluated and increased.”

The Lulutai Saab 340B aircraft, registered A3-PUA, is currently grounded after it collided with a concrete bund after it slid off the taxi-way at the Fua'amotu Domestic Terminal apron on 8 December 2023. The investigation for the final report of this incident is currently ongoing and expected to complete in the first half of this year.

See also:

https://matangitonga.to/2025/02/27/lulutai-airlines-needs-7-million-govt... [3]

https://matangitonga.to/2025/03/06/govt-appoints-tevita-palu-temp-ceo-lu... [2]