Outgoing Solomon Airlines CEO says carrier is in peril

By Andrew Curran

The outgoing interim Solomon Airlines CEO says 90% of its domestic inter-island routes fail to cover their direct operating costs, let alone make a profit, highlighting the difficulties of operating a small airline in the Southwest Pacific.

Writing in the Solomon Star newspaper, Paul Abbot said the difficulties of running such airlines should not be under-estimated.

“Pacific Island airlines are particularly complex businesses, often very much undercapitalised with a majority of routes completely unviable commercially, due to very high operational costs when compared with the revenue generated,” he wrote.

Abbot, who is stepping down as interim CEO following the appointment of Matthew Findlay as CEO, made headlines earlier this month when he took Qantas to task for proposing to operate a fifth weekly round-trip on the Brisbane (BNE) – Honiara (HIR) route.

Abbot doubles down on Qantas

He continued the theme in the newspaper, saying Qantas' application felt like “the final straw” on a route where passenger numbers are in decline. Abbot says around 730 weekly passengers fly the Brisbane - Honiara city-pair which is served by two carriers who together offer approximately 1000 seats a week.

Abbot is particularly critical of Qantas because it is imperilling a route Solomon Airlines depends on to cross-subsidise its domestic network.

“Originally Solomon Airlines domestic operation existed, only as it was hugely financially propped up by the community support grants from the Government and importantly cross-subsidised by money earned by our international operation,” he said.

Solomon Airlines’ small international network covers routes to Nadi (NAN), Port Vila (VLI), and Auckland (AKL). It will start flights to Port Moresby (POM) and Christchurch (CHC) this year. These flights financially support the more extensive domestic network.

“Across Solomon Islands every week, Solomon Airlines operates over 100 loss-making domestic flights," Abbot continued. "Using our current Twin Otter and Dash 8 aircraft, we operate a busy, yet often interrupted schedule to 23 destinations between Honiara and the provinces,” Abbot said, adding that the government-owned carrier played a vital nation-building role.

“The reality is that 90% of routes fail to come close to covering even their direct operating costs, despite fares charged often appearing to be high to the average traveller. But these routes remain a vital connection for the people of the Solomon Islands with the nation’s ongoing development at risk should they cease.”

“Only a government-owned airline will ever truly support socio-economic objectives for the long haul. Only a national carrier will tirelessly subsidise loss-making domestic routes for the good of its people and the welfare of far-flung communities.”

A major threat to Solomon Airlines

Abbot says the push by Qantas into Honiara is just a minor notch in their network but was a major threat to his airline’s profitability. “By 2025, Solomon Airlines international airline is barely financially viable,” he said. “Our former partner becoming our direct competitor has been financially crippling.”

“The economic reality for the nation is that the current annual passenger base of around 120,000-150,000 for both international and domestic travellers is insufficient to cover the cost of operation, under the current structure and indeed for any airline looking to cover international and domestic operations without substantial and ongoing investment."

"Domestic numbers continue to decline, due to cost of living pressures, and the airline is operating at about 80% of the numbers required domestically to break-even.”

“Currently, there appears to be no economic drivers on the horizon that could address this issue. There is no extractive industry potential with the capacity required to drive economic growth, FIFO flows and secondary business development.”

“As a result of all factors, our international revenue has been significantly impacted with severe losses in 2024 and within the organisation there is no further cost cutting we can pursue, without compromising our own operation and its safety.”

“At Solomon Airlines we are at a crossroads, potentially at the final decision point concerning the future of the airline.

Abbot will remain "on deck" until the end of March while Findlay settles into the CEO's role.

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Contact the writer: andrew@aerosouthpacific.com