ABSTRACT
Possibilities for economic growth in most Pacific island countries (PICs) are limited because they are small in size and population, geographically isolated, lack natural resources, and their domestic markets alone do not justify frequent air traffic. Since the end of the Second World War, international air services were operated between countries under strict bilateral air services agreements (ASAs) negotiated between the two countries. Traditionally in the South Pacific, air services from such metropolitan gateways as Sydney and Auckland have dominated air transportation. Southwest Airlines adopted a low-cost business model shortly after deregulation was passed. In the USA and, later, in Europe, airline liberation facilitated the emergence of value-based or low-cost carriers (LCCs). The future of tourism in the South Pacific Islands depends almost wholly on the provision of frequent, sustainable and reasonably priced air transportation to and within the area. Nationalistic and ownership constraints were gradually removed in response to increasing trade, tourism and air transport liberalisation.
