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Air Tahiti Nui

Air Tahiti Nui is the little airline that can  Dec 10, 2008

A favorite destination for Southern California honeymooners, Tahiti and its neighboring islands are among the few places in the world where couples can sleep in over-the-water bungalows and wake up to the sounds of the lapping ocean right below their feet.

But to get there, most visitors have to fly a tiny airline with a fleet of just five jets that despite its size has exceeded industry and passenger expectations by acting big.

Last month the obscure airline, Air Tahiti Nui, celebrated its 10th anniversary, having survived several industry upheavals that have claimed dozens of much larger airlines.

Along the way, the flagship carrier for Tahiti became known as the "little airline that could" and for the last several years has been ranked among the world's best airlines, joining an elite crowd whose typical fleet is 50 times larger. The "Nui" in its name means "big" in Tahitian.

"It's a success story," said Joe Brancatelli, who runs the business travel website "Simply surviving is a victory for them. Ten years as an airline that is respected, safe and liked puts it in a category all by itself."

But now the airline is facing perhaps its toughest test yet in the global economic downturn that is pummeling even the biggest airlines.

Last week, the International Air Transport Assn. said that although declining fuel prices have provided a "welcome relief" for airlines, the "gloom continues and the situation of the industry remains critical."

And the fallout could be dramatic for Tahiti and the surrounding islands in French Polynesia that have served as tropical havens for honeymooners and upscale vacationers. The airline is responsible for 70% of the visitors to the Pacific islands. Los Angeles International Airport serves as its main hub for American and European travelers.

"It has been a tough year for us," said Nicholas Panza, Air Tahiti Nui's vice president for the Americas. "We're all having to sharpen our pencils."

But the slump could make travel to Tahiti and the surrounding islands such as Bora Bora and Moorea more affordable.

To keep its planes full, the carrier has begun offering "short stay" airfares to get more travelers from Southern California and the West Coast to spend a "long weekend" in Tahiti. The island is about an eight-hour flight from Los Angeles and is in the same time zone as Hawaii.

The fare of $765 round trip is about 25% lower than the lowest fare it had been offering. A five-day package that includes a round-trip plane ticket and hotel starts at $1,665 per person. The airline said it also began offering a family promotion in which two children under 12 years of age fly free with two paying adults.

The latest fares are welcome news for travel agents who say selling Tahiti has always been relatively expensive.

"It's really a shame that business is down to Tahiti because it's such a gorgeous destination," said Diane Embree, a travel consultant for Michael's Travel Centre in Westlake Village. "But it has always been too expensive for most people -- especially when compared to other destinations. And with the economy as it is now, people have been looking to keep their travel costs down."

Both offers are new for the airline and are intended to draw passengers from a market segment that it has not targeted before. The airline had mainly focused on "romance business" -- couples on their honeymoons or celebrating their wedding anniversaries.

"We do think we can stimulate new demand with our long weekend, quick-getaway offers," said Yves Wauthy, the airline's chief operating officer.

Seeking out new markets has worked well for the airline, which began service in 1998 with much controversy. Tahiti is a French territory with a population of about 200,000. It has its own government, which decided in the mid-1990s that the island needed an airline to be self-sufficient and drive tourism. The carrier is about 60% owned by the Tahitian government and 40% by private investors.

"Locals were saying that the government was crazy," recalled Panza, a 25-year veteran of the airline industry who began his career with now defunct Trans World Airlines and in 1998 was recruited to help start the Tahiti carrier.

For the first three years, the airline operated with one plane, an Airbus A340 wide body that was initially leased from another carrier, and flew U.S. tourists from LAX to Papeete, Tahiti.

The airline's big expansion came shortly after 9/11 when other carriers began grounding planes, even those that had just come out of the factory. The airline quickly grabbed three new planes in the industry's version of a fire sale and now has one of the youngest fleets in the industry. Most start-up airlines have older fleets since used planes are cheaper.

With the new planes, the airline began expanding the network to Japan and France. But the flight to France required a stopover at LAX, which created a new market for business travelers flying from the West Coast to Europe.

In a quirky outcome of a bilateral agreement between the U.S. and France, Air Tahiti Nui is only one of two airlines that have nonstop flights from LAX to Paris. The other is Air France.

About half the passengers flying Air Tahiti Nui between LAX and Paris are business travelers, with the rest vacationing Europeans headed to Tahiti. Some Southern Californians have also found it to be a cheaper alternative to Europe.

Bob Kazam, a financial planner and resident of Agoura Hills, said he was first lured by the airline's lower fares, which were 30% to 40% cheaper than Air France. A travel agent had recommended the carrier for a trip to Europe, but Kazam said he and his wife were initially reluctant since he had not heard of the airline before.

"We decided to try it and found the service was good and the crew was very welcoming," said Kazam, who last week was waiting at LAX to board an Air Tahiti Nui flight to Paris. He has been flying the airline to Europe for about four years now. "Once we experienced the service, we said 'why not?' and have been flying them ever since."

Air Tahiti Nui is the little airline that can
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