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PAPEETE, Tahiti (Tahitipresse, May 1) – Air Tahiti Nui has been granted a tax exemption on the purchase of its fifth Airbus plane 35 months after requesting it and 22 months after receiving an agreement in principle from the French government tax authority, French Polynesia Government President Gaston Tong Sang announced Monday.

While this was good news for an airline whose deficit totaled some 3.5 billion French Pacific francs [US$41.5 million] at the end of 2006, Air Tahiti Nui CEO Geffry Salmon said he does not foresee a return to a balanced budget until 2008-2009. The airline's accrued deficit totals some six billion French Pacific francs [US$71.3 million], he said.

The tax exemption means the airline will save some three billion French Pacific francs, or US$35.6 million, off the purchase price for the A340-300 aircraft named Nuku Hiva after one of the destinations in the Marquesas Islands, Salmon said.

The purchase price for this investment from overseas is 10.8 billion French Pacific francs [US$128.3 million] he said. The tax exemption amounts to 2.97 billion francs [US$35.2 million] or roughly a third of the purchase price. The exemption requires that the plane remain in the Air Tahiti Nui fleet for a minimum of five years and six months until December 31, 2010, Salmon said.

"It amounts to the passing of a difficult moment," said Tong Sang, who was not less optimistic about Air Tahiti Nui's ability to once again start showing a profit, as it did from 2004 to 2005.

Salmon explained that the Direction Générale des Impôts (DGI), the French government's tax authority, granted the tax exemption "more than 35 months after" it was originally requested "and more than 22 months after the agreement in principle" was received.

The previous Temaru government took no action to obtain the exemption, Salmon said. Tong Sang, who became government president last Dec. 26, first intervened in Paris and then Salmon intervened with the DGI in March during a trip to Paris.

Air Tahiti Nui's Nuku Hiva aircraft started flying in July 2005 with the opening of the airline's non-stop flights from New York and Sydney. So it is nearly two years old.

The airline's four other A340-300s, each with the name of an island in French Polynesia, have been flying for various lengths of times. The first aircraft, the Mangareva, has been flying since December 2001, making it almost six years old. The Bora Bora II has been flying since January 2002, making it almost six years old. The Rangiroa and the Moorea have been flying since March 2003, making both of them four years old.

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