(eTN) – Hollywood producers looking to cast the role of a senior executive heading an airline flying to exotic destinations would easily select Dave Pflieger. He is smart, young, attractive, articulate and secretive. He has lived on the edge (Air Force pilots are considered macho); is self-confident (without being cocky), and welcomes the challenge of bringing the historically interesting but economically challenged Air Pacific airline back to profitability.
Years of Experience
Born into a military family in Seoul, Korea, Pflieger graduated from the US Naval Academy (1985) in Annapolis, Maryland, and flew B-52s and C-130s in the U.S. Air Force, Air Force Reserve and Air National Guard. He obtained his MBA and law degree (with distinction) from Emory University in Atlanta, Georgia, and graduated from the University of Southern California’s Aviation Safety Program.
His was associated with the law firm of King and Spalding until he was lured away by an offer from Delta Airlines where he became the Director of Flight Safety, Chief Operating Attorney and flew 767s, 757s and 737s. As the VP Operations with Delta’s Song he orchestrated the transit of 7 million people each year.
In 2004 he joined Virgin America as a founding officer, serving as General Counsel, Senior Vice President Legal, Government Affairs and Sustainability, as well as Vice President Operational Control Center and – he got to fly the planes as a Virgin America Captain – piloting the airline’s inaugural flight from Washington, DC to San Francisco.
Not Just a Pretty Face
It is possible that Pflieger was selected CEO because of his political acumen evidenced at Virgin America where he fought against competitors and the US government to prove the company complied with foreign ownership requirements. His negotiating prowess will definitely be called into play as he works Air Pacific and Fiji through the turbulence being created by the controversial issue known as Pacific Islands Air Services Agreement (PIASA; it has been approved by most regional governments, except Fiji, who wants to protect Air Pacific from the forces of competition. If implemented, the agreement would open the Pacific Islands airline route to all islands airlines instead of flights conditionally restricted by bilateral agreements negotiated by governments. It is interesting to note that PIASA currently exists; however, none of the countries that are signatories to the agreement have yet implemented it.
Resistance to the agreement also comes from the Association of South Pacific Airlines (ASPA) an organization representing most of the region’s airlines. ASPA believes that the accord would open the region to aggressive competitors from foreign airlines. Australia based airlines are of special concern for they are in a position to pick the profitable routes, leaving government-owned regional airlines to run unprofitable social service routes that are government mandated.
Connect the Islands
Air Pacific was not the first airline to connect the islands of Fiji. This pioneering event belongs to an Adelaide, South Australia based airline backed by Guinea Airway and operational from 1932 -1933. In 1947 New Zealand National Airways Corp. started a flying boat service connecting New Zealand with Fiji, Tonga, Samoa and the Cook Islands. In the late 1940s Qantas began flights to Fiji and by 1951 Harold Gatty, known as “the Prince of Navigators” (he circumnavigated the globe with Wiley Post in 1931), started a second airline, Fiji Airways.
In 1958 Qantas acquired Fiji Airways along with partners that included Air New Zealand, and two year later British Overseas Airways acquired a piece as did the governments of Tonga, Western Samoa, Nauru, Kiribati, and the Solomon Island. The plan: turn Fiji Airways into a regional airline.
By the 1970s tourism in the region surpassed agriculture as Fiji’s leading industry making Air Pacific so important that the Fiji government acquired a controlling interest in the airline (1974) adding service to Auckland, New Zealand (1975) and Brisbane (1975).
By 1981 regional tourism was increasing but the long over ocean route required more catering and salt spray made craft corrosion an issue. By 1984 the Fiji government wanted to buy out some Air Pacific partners and stopped requiring the airline to maintain loss-making jet connections with neighboring locales. The airline received no government subsidies and had to finance its own aircraft. Although there was little competition in the home market – at the time, the international routes were crowded with larger rivals.
In 1983 Air Pacific began flying to Honolulu but “Project America” turned from a clever idea into a disaster and after 14 months was deleted. Losing US$4-$7 million a year, Air Pacific accumulated losses in excess of US$20 million. However, when Qantas started a ten-year management contract with the airline in 1985 fortunes changed and by 1986 there was a profit of approximately $100,000. The association with Qantas helped the airline acquire business from travel agents and in 1987 Qantas paid $3.5 million for a 20 percent stake in the airline.
Fiji Flag Carrier
Two political coups in 1987 caused havoc in the Fiji tourism market, and international carriers withdrew from the destination, demonstrating the importance of Fiji having a national airline. By 1989-1990 Air Pacific showed an operating profit of US$11 million. Revenues were up 52 percent (US$100 million), carrying 300,000 passengers a year, with 650 employees.
Air Pacific once again tried to enter the American market in 1994. By this time Continental Airlines had abandoned its South Pacific route, and there was an increase of US interest in Fiji and Air Pacific began service to Los Angeles. In 2004 a new FJD 1.3 million airline order was placed making it the largest commercial investment in Fiji history.
The Qantas/Air Pacific relationship in 2010 took a turn for the worse and according to Fiji Today (July 20, 2010), “Qantas is urgently trying to bail out of the shareholding it owns. As there are no prospective buyers it is considering giving its share to the other partner the Fiji government.” Perhaps the absence of buyers can be tagged to the fact that Air Pacific experienced a loss of US$35.2 million for the year to March (2010), “…scaring off any potential investors.” Another problem is that the Fiji government insists that the airline operate for the good of Fiji and “…not on a commercial basis making holding onto the shares a risky option.”
Keeping up Appearances
In addition to weekly routine base maintenance in Nadi, the two Air Pacific’s B747-400 aircraft recently went through 2-weeks of major maintenance at the Singapore Airlines Engineering Base in Singapore during April/May 2010. The planned program covered the engine, airframe and cabin as well as a burnishing of the interior and deep cleaning. Electrical, hydraulic and mechanical systems on the airframe and engines were checked and serviced. Heavy maintenance is costly and runs into multi-millions of dollars; however they are necessary if the airline is to be both safe and competitive.
Air Pacific Ltd. Is the leading airline in the South Pacific and maintains a fleet of up to six jets and operates to 16 cities in 11 countries. Known as the “World’s Friendliest Airline” its sister airline, Pacific Sun operates aircraft on Fiji domestic routes and services regional sectors between Suva, Tonga and Funafuti, as well as between Nadi and Port Vila.
As the new CEO Pflieger acknowledges that higher fuel costs are a burden, and particularly difficult on Pacific Island routes where operational costs are not off-set by passenger and cargo revenues. The competition from Freedom Air (a budget subsidiary of Air New Zealand) and Virgin Blue, operating as Pacific Blue, adds to the pressure.
The Secretary-General of ASPA, George Faltaufon, is not optimistic about the Pacific’s battling airlines and his concerns include: political interference, rising fuel prices, costs of security required by Americans and Australians due to fear of terrorists, the difficult technical financial environment of the region, a shortage of resources and limited management skills.
From his CEO perch Pilferer appears to see things others do not, and he is optimistic about the future of Air Pacific, believing that hard work from a qualified team ensures the next fifty years for the airline. He is willing to change, once he has had the time to fully review his options. (The review started in May 2010).
In the interim, Air Pacific reaches a few of the most wonderful places on earth, and Business Class service and dining options reminds passengers of the time when airlines really believed that they were important, and keeping everyone happy was part of the corporate mission statement.
Air Pacific may not be the most famous airline that flies from Hawaii and Canada to the Christmas Islands, Tonga, Tuvalu, Vanuatu, Fiji, Kiribati, Samoa, Australia, New Zealand and Hong Kong, but it is a certainty that there cannot be a CEO that is more likely to succeed, bringing global attention to the company, increasing passenger numbers and improving bottom line profitability.
Air Pacific information is available at airpacfic.com .