Yesterday marked the first arrival of Palau Micronesia Air on Guam. The fledgling airline is taking on Continental Micronesia in the island hopper market, offering twice weekly island hopper service between Manila, Koror, Yap, Guam, Chuuk and Pohnpei. In addition Palau Micronesia Air has twice weekly flights to Darwin, Australia. I sense a possible trip in the near future; a week in Palau, then on to Darwin for some outback adventure.
The airline is definitely cheaper than Continental. Palau for $399, over a hundred dollars less than Continental. Darwin for $499, again cheaper than Continental’s flight to Cairns. On the downside, Palau Micronesia Air only operates 1 airplane right now. They hope to acquire a second plane early next year and begin Palau/Japan routes. I wish them luck. Micronesia can use another more competition in the airline business.
Air Mike is incredibly profitable for Continental, primarily due to their unchallenged monopoly status. In fact, Continental Micronesia is the most profitable division of Continental’s business. So Air Mike has no reason to lower rates, especially since there was no competition in the region. I even remember a previous Air Mike executive threatening Guam with the possibility of a pullout during the whole cabotage issue with Asiana a few years ago and local efforts to annul the airline cabotage restrictions. His basic attitude was, if politicians keep pressuring the US congress for relief from the cabotage laws, Continental will be forced to pull out of Guam and lay off the entire workforce.