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Government owns 66 percent of company’s shares

PAPEETE, Tahiti (Tahitipresse, July 16, 2008) – The Tong Sang government is making Air Tahiti Nui one of its top priorities in its preparations for a supplemental budget for the rest of this year even as it focuses on next year's overall budget.

At the moment, the government is talking of using 2.5 billion French Pacific francs (US$34.2 million/€20.95 million) from the proposed supplemental budget for Air Tahiti Nui, French Polynesia President Gaston Tong Sang announced Saturday. He did not say how much money the overall supplemental budget would involve.

[PIR editor’s note: Air Tahiti Nui is the first international airline based in Papeete, Tahiti, formed to develop inbound tourism. The Government of French Polynesia is the major shareholder (66%) along with other local investors. It has 782 employees]

Tahiti's president also announced, "I have forwarded a proposal for a new board of directors for Air Tahiti Nui, introducing two members of the UDSP opposition on the board."

He said the airline's scheduled board meeting on Tuesday "will decide on matters within its competence". He provided no details. "This board will also convene the next extraordinary stockholders general assembly meeting," Tong Sang said, without any indication what the agenda would be.

Tong Sang did not specify whether the supplemental budget money would be injected into the airline's capital. Last December, a special Air Tahiti Nui stockholders meeting approved the airline's 16th recapitalization with the government's injection of one billion French Pacific francs (US$13.7 million/€8.4 million). That increased the government's capital stake in the airline from 64.42% to about 66%, according to an official source at the time.

Saturday's announcement came at the end of a two-day government seminar of his15 cabinet ministers to prepare for the supplemental budget for 2008 as well as next year's overall budget. The supplementary budget's emphasis will be on investment "because we want . . . to revive the economic machinery", Tong Sang said Saturday.

The Tong Sang government is also preparing for the scheduled arrival at the end of this coming week of French Overseas Junior Minister Yves Jégo, who will be making his first official visit to French Polynesia since being appointed during the Sarkozy government's minor cabinet reshuffle in March.

Tong Sang said his supplemental budget for 2008 would be adopted on Wednesday during the weekly Council of Ministers meeting. The president also said he had asked French Polynesia Assembly Speaker Oscar Temaru to open a special meeting of the 57 legislators on July 29 to debate and vote on the supplemental budget.

Temaru, leader of a pro-Tahiti independence political party, is co-leader with pro-France, pro-autonomy leader Gaston Flosse of a 28-member opposition coalition in the assembly. The name of that coalition is Union for Development, Stability and Peace, or USDP.

During the two-day government seminar, the discussion focused on the broad outlines for next year's overall budget, with Tong Sang again insisting on a necessary "rigueur vis-à-vis the management of public funds". He explained by saying, "If we want to avoid raising taxes, we must effectively control public spending by the government, public institutions in order to avoid returning to this spiral of more public spending and thus more taxes.

"At the same time," the president continued, "we must develop our 'country's' economy through private investment. These are the only investments that bring wealth to the 'country'. We must continue to equip our islands, our communal infrastructures to promote the installation of these private activities." He gave as examples the use of deep ocean water offshore, pharmaceutical products, cosmetics, aquaculture and livestock breeding.

"We must develop renewable energies," Tong Sang said. "They will have an important place in the tax exemption plan. We are going to clearly improve and increase the rate . . . This will allow businesses to invest in development projects such as tourism, a job creating sector, but there also are new sectors, such as digital," he said.

Air Tahiti Nui, which celebrates its 10th anniversary of flying on Nov. 20, "has a big need", said Tong Sang Saturday in explaining why the airline is one of the top priorities for the proposed 2008 supplementary budget.

"It must get through September 2008 because fuel continues to increase (in price) and, if there's a company (in French Polynesia) that is currently suffering from the increase in (the price of) oil it is our airline," he said.

"Priority will be given to Air Tahiti Nui," Tong Sang continued. "But we will also be asking Air Tahiti Nui not to behave in such a way that we (the government) are only there to help ensure the increase in oil (prices). Our planes also should be filled. Income also needs to be earned for the airline, (which) also is a way of compensating for rising oil prices."

Air Tahiti Nui operates five Airbus A340-300 aircraft on flights to and from Los Angeles, Paris, New York, Auckland, Sydney, Tokyo and Osaka. However, the airline has announced it will stop a weekly Tokyo-Osaka-Papeete flight on Oct. 1 after nearly 10 years of operation, leaving continue with two weekly Papeete-Tokyo-Papeete flights.

Air Tahiti Nui also will suspend non-stop Papeete-New York-Papeete flights after Oct. 24, once again resuming Papeete-Los Angeles-New York-Los Angeles-Papeete flights. The non-stop flights to and from New York are expected to resume early next year, perhaps around March 30, but no official date has yet been announced.


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