FRANCE GRANTS TAX EXEMPTION FOR NEW CALEDONIA AIRBUS PURCHASES

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NOUMÉA, New Caledonia (July 31, 2000 - Oceania Flash/SPC)---The French government has granted New Caledonia a tax exemption for the purchase of two Airbus A-330 planes, the daily newspaper Les Nouvelles Calédoniennes reports.

The exemption was requested by New Caledonia's international flag carrier, Air Calédonie International (AirCalin), to accommodate its most important routes, those serving Japan, the United States, Australia and New Zealand.

The news was announced by territorial President Pierre Frogier, who had just been informed by French Secretary of State for Overseas Administrations Christian Paul.

According to Frogier, the tax exemption (pursuant to a bill passed in the mid-1980s to promote infrastructural development) involves "one and a half planes," meaning 75 percent of the purchase amount would be tax-free.

This means a tax rebate of some thirty billion French Pacific Francs (about US$ 220 million).

Until recently, Air France and AOM controlled New Caledonia’s links to metropolitan France.

However, a recent near-bankruptcy in AOM forced the re-vamped company to close its New Caledonian route.

And Air France now no longer flies a Paris-Tokyo-Nouméa route, only the Paris-Tokyo leg.

Alone, AirCalin now operates the Tokyo-Nouméa link.

The company currently owns one Boeing 737 and leases one Airbus A-310.

Pending the formalization of last week's Paris decision, New Caledonia authorities said they were now in a position to officially place an order for the two 278-seater planes with Airbus Industries.

Both planes are expected to be delivered by November 2002.

One is to be nearly entirely dedicated to the Japanese routes (Tokyo and Osaka), while the other will serve Australia, New Zealand, Vanuatu, Fiji and French Polynesia.

Meanwhile, New Caledonia's government is attempting to persuade Air France to acquire about 20 percent of AirCalin's shares.

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