PACIFIC AIRLINES COOPERATE TO MAINTAIN VIABILITY

News Release

Our Airlines Henshaw & Associates Media Consultants Brisbane, Australia

June 25, 2008

Nauru’s airline says all Pacific carriers must make hard decisions to stay viable

Nauru’s national air carrier, Our Airline, says the recent code sharing agreement reached between it and Solomon Airlines, is another stepping stone in the airline’s overall plan to maintain viability and strive for continued growth against potentially crippling fuel prices.

Agreement reached last week between the two airlines means Our Airline will provide twice weekly Honiara -- Brisbane and return services for Solomon Airlines passengers on its Boeing 737-300 aircraft.

Our Airline general manager, Jim Bradfield, said all regional aviation operators were being forced to make difficult decisions based on economic reality rather than just on national pride and hope for better times ahead.

"What many people don’t realize is that the cost of aviation fuel has risen a staggering 58 percent since July last year.

"Prices have increased by 12 percent this June alone," he said.

Mr. Bradfield said while Solomon Airlines passengers were seeing a reduction in weekly flight frequency, the agreement was based on common sense and economic reality for both carriers and would provide consistency of services in and out of Honiara.

"Our Airline has also been faced with a similar situation where we have been forced to discontinue our Nauru -- Tarawa services this month, at least for the time being.

"Until we can fly beyond Tarawa, that service is just a loss maker we can’t afford," he said.

"The simple fact is no Pacific airline can afford the luxury of flying aircraft around the skies with only a handful of passengers on board," he said.

Bradfield said despite the need for harsh rationalization measures, Our Airline was continuing to shore up its future viability with other opportunities as they arose.

He said Our Airline would begin its Norfolk Island to the Gold Coast service in October on behalf of Norfolk Air following a joint agreement reached between the two carriers three months ago.

"We are looking forward to providing all of Norfolk Air’s services next year, which will open up more opportunities where our aircraft can be profitably utilized," Bradfield said.

The airline is about to acquire an additional Boeing 737-300 series aircraft, which will provide the same fuel efficiencies and greater passenger capacity as its existing 737-300, to replace OzJet’s current Norfolk service, which uses the less fuel efficient 737-200 model.

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