A former Prime Minister of Tonga, Hu’akavameiliku Siaosi Sovaleni, has asserted that Lulutai Airlines, the government-owned airline facing serious financial difficulties, possesses sufficient assets to manage its debts. This statement comes in response to his successor, Prime Minister Aisake ‘Eke,’ who recently described the airline’s financial situation as dire.
Last week, Prime Minister ‘Eke’ and Minister of Public Enterprises Piveni Piukala indicated that the government had initiated a review of Lulutai’s operations and financial standing, assessing the possibility of winding down the company. During a press conference in Nuku’alofa, Sovaleni, who previously served as the chairman of the airline’s board, expressed confidence that the airline could emerge from its current troubles.
The airline has successfully repaid part of its debts, amounting to TO$800,000 (US$332,823) of a TO$6 million (US$2.49 million) loan owed to the Retirement Fund Board, which holds 27.19 percent of the airline’s shares. Sovaleni clarified that the remaining debt to the Retirement Fund totals approximately $5.7 million (US$2.37 million) in principal and interest. He emphasized that Lulutai’s asset value is adequate to cover its liabilities, contradicting claims of impending insolvency.
Commenting on recent allegations that Lulutai had sought a TO$7 million (US$2.90 million) government grant, Sovaleni denied these claims, stating that the airline is pursuing a loan meant to be repaid rather than requesting a subsidy.
The recent changes in leadership at Lulutai include the dismissal of its CEO, Poasi Tei, and the appointment of Tevita Palu, a businessman involved in the aviation sector, to lead the review process of the airline’s operations.
This turn of events shines a light on the issues facing Tonga’s aviation sector, which has been challenged by financial instability. However, the focus on operational assessments and potential restructuring could foster improvements in Lulutai Airlines, leading to a more efficient and reliable service for the people of Tonga in the future.
As the airline navigates these challenges, there is hope that proactive measures will lead to better management practices and ultimately a more sustainable aviation framework in the region.
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