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One of the world's best-kept secrets is the tropical paradise of New Caledonia. Situated in the South Pacific, closer to Australia than New Zealand and sharing its sunny climate, the country is a bountiful paradise with crystal clear waters and a slower pace of life. What isn't slow is the fast-moving innovative national airline Aircalin. Who are they, and what is it like to operate a first-class carrier in the South Pacific?

Destination: New Caledonia

When it comes to flying to New Caledonia, your options for carriers are as limited. Nouméa, the capital of the island, is also the location of La Tontouta International Airport on the south of the island. Only four airlines fly to the island nation, three of which are international carriers.

On the bigger end of the market, you have the Australian and New Zealand carriers such as Qantas and Air New Zealand. Currently, Virgin Australia has taken a step back from the international market and is now focusing just on local travel in Australia, and Jetstar has only limited operations in the region in the best of times. All three carriers have since restricted operations during the pandemic. There are still several services a week by Air Vanuatu - who operates flights to the named islands from New Caledonia.

Over-reliance on international carriers from other nations made it clear to the local authority that New Caledonia needed its own international airline, and thus Air Calédonie International was born.

Who is Aircalin?

Air Calédonie International would take on the shortened name Aircalin in 1996, and is the international airline of the New Caledonia government (99% owned and supported by the European French government). Founded in 1983, the carrier has a fleet of only four aircraft.

But these are not ATR turboprops like the domestic airline arm of New Caledonia; instead, there are two Airbus A320-200s and two brand new Airbus A330-900neos. The airline also has two Airbus A320neos on order for a 2023 delivery. This makes Aircalin the first carrier in the Pacific to have the new start-of-the-art A330neo, with a modern business class cabin rivaling airlines like Singapore and Emirates.

With these long-range jetliners, the carrier can operate a wide range of destinations for locals and tourists alike. They also provide an essential connectivity service to other French territories throughout the South Pacific and all the way to France (by connecting to an Air France flight in Japan).

Technically the carrier also provides the world's longest domestic flight, Nouméa, to Papeete - a distance 2,900 miles over the Pacific.

What challenges does the airline face?

Naturally, the biggest challenge right now for the airline is bunkering down until the Coronavirus has run its course. The island nation is particularly vulnerable due to its isolation, and one of the best ways to prevent tragedy is to (unfortunately) reduce flights. Apart from government flights to bring citizens home, Aircalin is looking like it will be stuck to irregular cargo cycles for the time being.

Aircalin CEO Didier Tappero has had to make some difficult choices as "the downturn forced the company into survival mode, with a return of passenger numbers seen last year now not expected before 2024. Since the suspension of regular flights in March, the airline had lost 93% of its passengers and incurred a loss of $US7 million." It is believed that the airline has also asked for a small loan from the government to support itself until operations return.

When it comes to AOG and MRO services, Aircalin is somewhat at the mercy of providers based in New Zealand and Australia. As the power of the dollar is somewhat stronger than the New Caledonian CFP franc (Pacific Franc), Aircalin needs to spend more to stay competitive with carriers from bigger nations. This also means that they are competing with international carriers for spare parts and other maintenance expertise - which during a supply parts shortage can be tough.

There is also some turbulence at home. As Aircalin and its domestic counterpart are the only local airlines operating to and from other nations, there is a pressure to reduce the ticket price well below the competition.

Aircalin needs to operate at the same standard level as its codeshare partners Qantas and Air New Zealand, but then also has a duty (as a government airline) to provide services between island nations. An inquiry began in 2019 to investigate options, with the matter due to be settled sometime this year. One possible option would be the creation of a low-cost carrier in the island nation. One that would complement Aircalin (much as Jetstar does to Qantas in Australia) and also provide a cheap alternative with reduced onboard amenities for local citizens.

What is their market strategy?

Aircalin has taken a strategy to focus on the lucrative high-wealth tourism trade, working with resorts and tourism boards to attract tourists from nearby developed nations. What was surprising is the long-haul international destinations of Japan and, at one time, Korea. Bringing rich tourists from Japan (who love islands if Hawaii is anything to go by) is an intelligent business strategy and has paid off for the carrier in recent years.

When the current crisis settles, and the global aviation industry returns to the 'new normal,' the carrier will need to ensure that they can target those tourists looking to travel. Focusing on Australia and New Zealand, and how the island's French colonial history makes it stand out among rivals like Fiji and Tahiti, may be a challenge - but with a proximity advantage and arguably the best weather out of the group, the market should be theirs for the taking. Another alternative for the tourism trade is China. The Chinese tourist trade has swamped many island nations such as Bali and Thailand, and with the right marketing, New Caledonia could benefit as well.

Fortunately, with such a small fleet and less than 1000 employees, the airline has fewer upkeep costs and is easier to support. It should come through this crisis in an excellent position to take the lead with its natural advantages. If its new fleet and plans are anything to go by, we can't wait to see what Aircalin will do next.

Eways Aviation is a leading airline and aviation partner throughout the South Pacific and Oceania and stands ready to help firms fulfill their dream of taking to the sky. Get in touch today to see if we can help you through MRO, AOG, and many more services.