By TED REED
Ted Reed is a contributor of Forbes, America’s leading business magazine. He has been covering the airline industry since 1989.
Back in 1971, some ‘marketing genius’ decided to change the name of the Fiji Islands’ national carrier from the easily distinguished ‘Fiji Airways’ to the easily forgettable ‘Air Pacific’.
Probably the best result of this ill-conceived move is that it provided the opportunity, 41 years later to change the name back as part of a total restructuring of the airline.
On Monday July 1 (today), the new Fiji Airways’ new A330 will make its first flight into the new Tom Bradley International Terminal at LAX in USA.
A US brand launch is scheduled for July 8 at LAX. Fiji Airways operates daily service on the only US route to Fiji.
The Air Pacific name “had no traction in the market,” said acting chief executive Aubrey Swift, in an interview.
“People didn’t know who we were. We tended to get confused with an air conditioning company.
“The concept behind the 1971 switch was that management was looking to build a regional carrier, but that didn’t materialise.
“Now, we are a hub carrier out of Fiji and we’ve got a story we can build a brand around: an easy-to-market destination, an idyllic, tropical island with an authentic and proud culture.”
New aircraft, livery and uniforms
Besides changing its name, Fiji Airways secured three new aircraft including Airbus A330s seating 273 passengers (24 in business class) and enhanced the cabin interiors with new features including Fijian art work and new crew uniforms.
The carrier’s principal (USA) competition, Mr Swift said, comes from other Pacific carriers such as Hawaiian and Air Tahiti.
“They serve their island homes and, of course, proudly display those islands’ names,” he said.
The LAX/Fiji flight lasts about ten hours, several hours longer than the competitors’ flights.
That is one reason, Mr Swift said, that Fiji Airways worked so hard to enhance its aircraft.
The turnaround amidst competition
The truth is that Air Pacific required more than a name change.
When Virgin Australia boosted flying with low fares between Australia and Fiji in the aftermath of the global financial crisis, Air Pacific was forced to reduce its own fares in its principal market.
Australia accounts for about a third of the airline’s traffic, and Qantas is a 49 per cent owner.
In the three years ending in fiscal 2011, Air Pacific lost about US$63 million (FJ$119 million). But a restructuring that began in 2010 brought a net profit of US$8.5 million (US$16 million) in fiscal 2012.
“We worked hard to turn a loss into a profit,” Mr Swift said.
Mr Swift is a veteran of 28 years in the airline industry who started at British Airways and subsequently worked for Virgin Blue and in consulting before he joined Air Pacific in 2012.
“We had to get our pricing right, to make sure we (priced) as a leisure carrier,” he said.
“We had to re-engineer labor contracts to drive costs down. We increased utilisation on our 737s to 11.5 hours (daily) from 8.5 hours. We increased loads from the mid-60s (percentages) to the high 70s.”
The last piece, he said, was modernisation of the wide body fleet: the carrier bought three new Airbus A330s to replace Boeing 747-400s.
The US tourism market
The US is Fiji Airways’ second biggest market, accounting for about 20 per cent of revenue.
Like many, Mr Swift is impressed by the new Tom Bradley terminal.
“It works quite well for us. We get in before the main peaks start,” he said.
No other carrier flies non-stop from the US to Fiji, although many carriers fly to Australia.
At LAX, Fiji Airways has code shares with American on about 23 domestic routes and with Alaska on about a half dozen routes.
The carrier has served LAX for about three decades.
Fiji Airways’ other markets
At one time, it served Vancouver, B.C., but if future North American expansion occurs, San Francisco is the most likely destination, Swift said.
In the Pacific, Fiji Airways serves Australia, New Zealand, other Pacific islands and Hong Kong, where it hopes to develop China business.
As for joining an alliance, “We have toyed with the idea,” Mr Swift said.
“The cost (seems) prohibitive, but that could be an opportunity for the future.
“In the meantime, what we’ve done, and what we prefer to do is to stay in our niche, an inbound destination carrier to the South Pacific. We are looking to be number one there.”
Fiji Airways’ Airbus A330 at LAX before its inaugural flight from LAX to Nadi in May. Today, Fii Airways’ new A330 will make its first flight into the new Tim Bradley International Terminal at LAX. Photo: Devin Galaudet