Tongan Government Short-lists Potential Lulutai Airlines’ Buyers

By Andrew Curran.

Fly Niu is one of two entities short-listed to operate state-owned Lulutai Airlines, Tongan Prime Minister ‘Aisake Eke has told Nukuʻalofa’s Kaniva News outlet.

Eke told the newspaper on October 7, 2025, that the government had whittled the pool of potential investors interested in operating the airline down to two entities, of which Fly Nui was one. The government has not said how many entities initially expressed interest.

Fly Nui was established in 2004 following the collapse of Royal Tongan Airlines. It had a brief (three month) operating window running domestic services using a DHC-8-400 before the government revoked its air operator’s certificate for political reasons.

The brand lay dormant for 15 years before it was acquired in 2019 by South Pacific aviation identity ‘Atu Fīnau, who has devoted himself full-time to the enterprise after getting sacked as CEO of Air Vanuatu in late 2022.

Early in 2023, Fīnau told the Tongan Government that his company was interested in taking over the day-to-day running of Lulutai Airlines, which was struggling operationally and financially. At the time, the government of the day reportedly denied any party had expressed any interest in the airline.

Fast forward two and a half years, and Tonga has a new prime minister keen to offload Lulutai Airlines to a private investor. The same prime minister was behind an expression of interest campaign launched earlier this year.

In June, reports surfaced that New Zealand’s Sunair Aviation was interested in Lulutai Airlines. However, in July, New Zealand’s Civil Aviation Agency grounded Sunair for ten days following a maintenance audit – the airline’s third grounding in a decade.

This week, Eke did not say if Sunair was the other short-listed party, but he has previously said he is only interested in entities with the necessary cash, track record and skills to run an airline.

Lulutai Airlines flies scheduled services between Tongatapu (TBU), Eua (EUA), Ha'apai (HPA), and Vava'u (VAV) using three aircraft – a Chinese-made Y12, a DHC-6-300 Twin Otter, and a Saab 240B damp-leased from Air Chathams. It is Tonga’s only domestic airline and it has an important public service function. But it is notoriously difficult to turn a profit running an airline in Tonga.

Now five years old and founded after the demise of Real Tonga Airlines, Lulutai has relied on government handouts and loans to keep flying, although Eke recently suggested the airline was now breaking even.

The Kaniva News reports that a sticking point in privatisation negotiations is a TOP6 million (USD2.5 million) loan provided by Tonga’s State Retirement Fund in 2023, which acquired 27.2% of the airline as a result. Lulutai Airlines has repaid some of that amount, but the remaining debt is a key issue in discussions between the government and the remaining potential investors.

The government is already running behind schedule regarding its Lulutai privatisation plans. However, Eke and his Minister for Public Enterprises Paula Piukala haven’t said when they’ll announce the winning bidder, assuming the bidders stay the course and the matter of the loan gets resolved. 

Photo: AI-Generated.