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By Oyaol Ngirairikl

KOROR, Palau (Pacific Daily News, August 26) - The flag of the Republic of Palau, a full moon against a blue sky, will fly higher than ever before. The flag is displayed on Palau Micronesia Air’s 737-300, which was scheduled to make its inaugural flight last night to Darwin, Australia.

"We’re proud to have our own airline with our island’s name. In a way, it kind of sets us apart from other islands in that we’re brave enough to take part in this," said Valentina Edesomel, a resident of Ngerchemai in Koror.

Cecelia Yamada, a 53-year-old resident of Medalaii in Koror and many other Palauans echoed Edesomel’s sentiments.

But while they were proud of the inaugural flight and the possibilities ahead, some residents said they had some concerns about the fledgling airline's ability to compete with other airlines in an arena where other airlines have failed.

Yamada said it will be difficult for Palau Micronesia Air to compete with Continental Airlines, which has flown routes between Palau, Guam and other islands in Micronesia for decades.

"It’s going to be hard to catch up with Continental because they have more money and they’re bigger," Yamada said.

"Right when Palau Air announced cheaper flights to the Philippines for $199, Continental announced a $189 air fare to the Philippines."

Alan Seid, part owner and chief executive officer of the fledgling Palau Micronesia Air, said he’s not trying to compete with Continental.

"They’ve got a deeper pocket so it's harder to compete with them. I don’t think we ever wanted to come in and try to outdo Continental. We just want to get our little niche in the market," Seid said.

He added that feasibility studies have shown that the Asia-Pacific market can absorb a small airline.

"And of course, we do hope the local people -- the island people -- will support us and keep us alive for years to come," Seid said.

One of the concerns that popped up during interviews with various Palauan residents yesterday was Air Nauru’s failure in the region.

But Seid said he hears the comparisons made between Palau Micronesia Air and Air Nauru, but no comparison can be made.

The PMA chief executive officer said the biggest difference between the two airlines is the ownership and the expertise behind the ventures.

"PMA is not a national airline. We don’t have a government trying to run an airline. We have professionals," he said.

Seid pointed to other successful airlines based in Pacific islands: "Tahiti Nui is a great success. Air Asia, which uses the same type of aircraft, is a huge success."

But Seid also acknowledged the risk involved in the airline industry.

"We’ve done our homework. We had our feasibility studies done and we’ve taken the risk and made the investments," Seid said. "At this point, there’s only one way to find out what happens. We just need to do it."

August 27, 2004

Pacific Daily News: www.guampdn.com

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