Tongan Government says no ATR72 for Lulutai Airlines

The Tongan Government says it won't buy an ATR72 aircraft for Lulutai Airlines, despite previously considering the idea. Instead, the government says it will restructure the state-owned carrier and seek private investors.

This week, Deputy Prime Minister Taniela Fusimalohi confirmed the decision in Tonga's Legislative Assembly. "No," he said. "There is no ATR."

Lulutai Airlines has proved a drain on Tonga's finances since it was established in 2020 after the demise of Real Tonga Airlines. Tonga requires an reliable inter-island air service. However, they rarely prove profitable (or reliable), and Lulutai Airlines follows this pattern.

A new ATR72 aircraft costs around USD26 million, although it is likely Lulutai would have secured a discount.

Former Prime Minister Siaosi' Ofakivahafolau Sovaleni was heavily involved in forming Lulutai Airlines and later sat on its board as chairman. The lack of transparency surrounding Lulutai's financing during his administration was heavily criticised. Sovaleni was ousted as PM late last year after falling out with Tonga's King Tupou VI.

Sovaleni's replacement, ʻAisake Eke, is taking a harder line on Lulutai Airlines and its requests for financial bailouts. He instituted a review of the Lulutai business model and removed its CEO, Poasi Tei.

Eke's administration now says Lulutai Airlines is breaking even and operating with three aircraft – a Chinese Y12, a DHC-6-300 Twin Otter, and a Saab 240B damp-leased from Air Chathams.

The airline flies scheduled services between Tongatapu (TBU), Eua (EUA), Ha'apai (HPA), and Vava'u (VAV).

The current government argues that Lulutai Airlines is now better positioned to attract private investment. It has initiated an expressions of interest campaign to solicit investment. Recent reports suggest New Zealand's Sunair Aviation was interested. The government says it will only consider investors who can demonstrate they have the money and experience to run Lulutai Airlines.

June 30 is the deadline for prospective investors to submit their expressions of interest.