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By Scott Radway

KOROR, Palau, (Pacific Daily News, June 11) - Palau Air has
hired a former Qantas Airways executive and one-time general manager for two
South Pacific airlines as its chief executive officer, a critical step in going
nose-to-nose in Micronesia with industry giant Continental Airlines.

James Bradfield, the new chief executive officer, appears to be
the perfect fit for the airline. Most recently, Bradfield managed Mercury
Consulting Services based in Sydney. From 1996 to 1999, he was the general
manager of Royal Tongan Airlines, and from 1994 to 1996, general manager of
Solomon Airlines.

Bradfield worked for Qantas from 1968 to 1992, spending his last
three years there as general manager of QH Tours.

Continental's regional arm, Continental Micronesia, is based in
Guam and is the only airline that serves the entire region with some connections
to Asia-Pacific countries. Others have tried to compete with Continental; all
have failed.

But Palau Air - bolstered in part by the belief that coming
growth in tourism to Palau will aid its venture - plans to offer similar
Micronesian routes, and flights to Tokyo and Manila. Long-term plans are to
develop Palau as a regional hub for travel, with direct flights from such places
as Australia and Singapore.

Palau Air's launch date is planned for December, pushed back
from this month.

Bradfield "has been touched by the warmth of the island
people, so he is taking on this challenge with a strong sense of compassion and
vision," said local business magnate Alan Seid, who is launching the
airline. "He sees a lot of need for an additional carrier to help with the
economic and social growth of the islands." Bradfield is expected to arrive
in Palau June 17.

The business plan created by Toronto-based Moncrieff Management
Ltd. sketches a venture with two Boeing 737s that could be marginally profitably
in its first years.

But Palau Air is vulnerable to an aggressive response from
Continental, something Continental already has promised. Seid said he believes
with the growing Japanese market and the addition of Koror-Tokyo flights from
the start, the airline should prove profitable.

Palau Air has seen a number of key developments paving the way
to the airline's launch date. One of the most important, Seid said, is an
agreement whereby Honolulu-based Aloha Air will help manage the new airline,
from training staff and handling maintenance to marketing and regulation
compliance. Another is an interline agreement with Japan Airlines to include
Palau Air in its reservations and marketing system. That way, JAL customers can
easily use Palau Air to travel from Guam to other island destinations.

To start, the business plan states the venture needs $5 million
in capital. Seid said not all of it has been raised, but he is confident the
goal will be met. A sizable portion of the funding -- $1 million -- has come
from Japanese tourism industry leaders.

Seid is also pursuing capital from Pacific islanders and
governments. So far Yap, a state in the Federated States of Micronesia, has
kicked in $500,000, he said. Other islands that would be served by Palau Air are
also interested in investing, he said. As a result, he said, Palau Air is
considering changing its name to something more regionally inclusive, such as
Palau Micronesia Airlines.

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