Pacific Airline to “Indefinitely” Stop All Flights Amid Chinese Pressure

Palau Pacific Airways said that China has labelled Palau an “illegal tour destination” and barred its citizens from visiting, leading to a 13 per cent customer drop since November.

By Joon Kim

Taipei-A pacific charter airline in Palau will plan to cease its flight operations and services before the end of this year due to a “lower demand” in annual tourism, its parent company stated in an announcement released last Friday.

Sea Passion Group notified to the Palau National Congress on July 13, that despite its vows for “fair and honest competition,” some entrants had lowered its sales to “unmaintainable levels” for profits in short peaks, reported Island Times, Palau’s sole administrative newspaper publisher based in Koror City, its state capital.

“As the situation in China continues to deteriorate, the vicious market pricing by our competition has also made Palau a low-price destination and, also extremely difficult to be competitive and hard to recover from,” it said.

Sea Passion Group, which oversees Palau Pacific Airways and Sea Passion Hotel, was founded in November 2014. The airline commissioned international flights from Koror City to Hong Kong, with additional destinations at Macau and Taoyuan. It then strengthened ties with Global Strategic Alliance, a business partnership based in Hong Kong with operations in China and Great Britain, from June to August 2017.

In Nov. 2017, Palau’s Speaker of the House of Delegates, Sabino Anastacio, a former state minister, visited Taiwan’s Ministry of Foreign Affairs and Legislative Yuan, to strengthen bilateral ties with Taiwan. Palau officially established diplomatic ties with Taiwan in December 1999.

In the same month 2017, China has banned all group tours to Palau and the Vatican-both of which have diplomatic relations with Taiwan, moreover, implemented fines on tour agencies up to $45,000. As a result, Palau rung with a 16 percent loss in Chinese tourism in the last quarter of 2017. Chinese tourism brought more than 88,000 visitors there a year at its peak.

“We must simply identity new partners,” Palauan president Tommy Remengesau Jr. said in April. Delta Air Lines, based in the United States, ended flights between the Northern Mariana Islands and Japan in February.

Three months later, Delta canceled service routes between Koror City and Saipan, Vietnam, also due to low market demand in the western Pacific locality.

Meanwhile, the Ministry of Foreign Affairs in Taiwan has added two direct flights every week to Koror City from June to August 2018, in support to “diversify” Mr. Remengesau’s staggering tourism policy.

Since 1994, Palau has deepened relationships with Taiwan, which has an embassy in Koror City. Last December, Mr. Remengesau promised to hold “extremely stable” affairs with Taiwan, while not eying towards mainland China.

“Palau will not bow to Chinese pressure to cut off Taiwan,” President Tommy Remengesau Jr. said in an interview with Nikkei, a Japanese media, “If we had a choice, we would like to recognize China and Taiwan tomorrow.”