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Cook Islands to further underwrite Air NZ flights

Monday 20th December 2010

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The Cook Islands cabinet has agreed to underwrite Air New Zealand and Air Pacific flights from next year.

The money will help fund direct Air NZ flights to and from the islands to Los Angeles and Sydney, and the new Air Pacific Fiji-Rarotonga route, Radio Australia reported today.

It would also help market the Cook Islands in Australia and the northern hemisphere.

Last week, cabinet approved new three-year contracts for the airlines to provide the routes. The contracts are due to be signed this week.

Two years ago, the Cook Islands government said it was looking at paying up to $5 million a year to support the direct weekly Air NZ flights to Los Angeles from Rarotonga.

The islands agreed to enter another risk-share agreement with Air NZ, to pay for any shortfall on the route. At that point, they had already paid over $1.5 million since the "risk-sharing' subsidies started in 2007.

The flights were important to secure access to visitors from North America, the UK and Europe, and the Cook Islands - like Samoa and Tonga - had been facing a deadline to agree to pay for Air NZ's losses on its Los Angeles routes or lose the direct flights.

Air NZ threatened to end those legs unless the island governments agreed to make up the shortfall.

Samoa complained then that Air NZ was effectively holding the country to ransom.



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