TS107

ESSAY
MAJOR
ASSIGNMENT

NAME: SONAM SONIKA

STUDENT ID: S11145116

CAMPUS: LAUTOKA

Fiji is a tropical island nation located in the Melanesia, part of Oceania in the South Pacific
Ocean and embraces an archipelago of more than 330 islands, of which 110 are permanently
inhabited. Fiji is one of the most developed countries of economies in the pacific island nations
as it is gifted with forestry, inorganic minerals and fishery recourses but it remains a developing
nation with a subsistence of agricultural sector and tourism sector, ginger and coconut copra are
also extensive. Fiji has a population of 912,241 people (2018 estimate). Thus this essay will be
describing Fiji’s profile, highlighting the key sectors that support Fiji’s economy and how
aviation is the key problem for the South Pacific island states from the key markets for South
Pacific tourism, together with how open skies policy can address transport problems and
introducing low cost carriers in the south pacific countries.

Firstly, the key sectors that support the economy of Fiji are agricultural sector, forestry and
tourism. The agriculture sector of Fiji plays an essential part in the Fijian economy. It
contributes to around 28% of employment in the formal sector, also effectively contributes
towards food security, foreign exchange earning sang economic growth. Sugar industry is one of
the biggest providers of export earnings and also supports close to 200,000 Fijian families
livelihood. It is also known as the “back bone” of Fiji’s economy. According to an article in Fiji
sun (http://www.fijitimes.com/story.aspx?id=355020), it is said that sugar industry contributes
about 12-15 percent of agricultural GDP. As income earner, it is still forth for Fiji and the
industry is still the country’s largest employer out the state sector. The European Union is the
major export market for Fiji’s sugar. In 2012 it was noted that sugar and molasses exports have
accounted for about 18.0 percent of the total domestic exports while the non-sugar agricultural
sector contributes around 7.0 percent to Gross Domestic Products. . The non-sugar agriculture
commodities comprises of root crops, tropical fruits, vegetables, spices, coconut products, cocoa,
poultry, dairy and livestock. Fiji’s agricultural sector is well-thought-out more with the
commercial lines, while the subsistence sector remains substantial. Large-scale agriculture
consists of coconut, palm oil, cocoa, coffee plantations, and beef cattle.

Moreover, Fiji has been self-sufficient in most of the timber products through the utilization of
its natural forests and plantation resources for more than ten years. Fiji has the world’s biggest
mahogany plantation with significant untouched revenue generating potential. In the last 3 years,
export earnings from the forest products have been temperately nailed around one percent of
GDP. This sector supports export earnings, investment for employment and growth. The future
of Fiji's economic in the forest sector is bright. Fiji is blessed with a huge indigenous or
natural forest cover tallying approximately 956,860 hectare. At present wood products ranks as
Fiji's fifth most important domestic export commodity after sugar, fish, mineral water and
garments. Earnings from forestry products are greatly influenced by the price of exports and
weather patterns. The view however continues to be greatly dependent on the commencement of
large-scale utilization of Fiji's mahogany plantation resource. Fiji’s main timber related products
are woodchips, mahogany and other wood products. Woodchips is the major forestry export
earner till today.

Furthermore, the major key sector in Fiji which supports the economy of Fiji is the tourism
industry. Fiji with its white sandy beaches and all year round tropical climate attracts a number
of tourists every year. It also has all types of hotels from budget hotels to luxury five star hotels
together with a number of resorts. Fiji has a number of coral reefs, kayaking; snorkeling,
canoeing and scuba diving are common tourist activities. There are many tourist attraction sites
in Fiji such as historical places, forests, art galleries and the lovely beaches such as Beachcomber
Island. Tourism is one of the major contributors towards Fiji’s economic growth and is the
largest source of foreign exchange in comparison to other industries such as sugar, fisheries,
garments and forestry. The tourism sector accounts for a total of 39,500 direct employment or
11.7% of total employment. It is also a fastest growing industry in terms of employment. Visitor
arrivals have continued to increase over the past 20 years. Australia and New Zealand continue
to be Fiji’s leading source of tourist markets with a joint share of 67 percent. United States of
America and Canada make up to a total of 11 percent of the market share, the European
Economic Community including UK, Japan, China/Hong Kong and the rest of Asia has 7 percent
tourists, Pacific Islands 6 percent and Others have 1 percent tourism market. Over the last decade
the tourism industry has grown at an annual rate of 10-12%. According to the Fiji Bureau of
Statistics, Fiji’s earnings from tourism stood up to 358.2 million as of March 2018 which has
increased by 4.7% as of March 2017. Tourism is therefore a critical pillar of the economy. 

Moving on, according to the Wikipedia aviation or air transport, refers to the activities
surrounding mechanical flight and the aircraft industry. The main key function of aviation is to
provide services to its passengers by transporting them to their desired destination and also
freight goods. Aviation also helps to reach out to remote areas. Due to the high air fare rates, it
is difficult to travel to the South Pacific Island States if compared to the other aviation air prices.
Due to the isolation of the South Pacific Island States, the tourism sector is affected badly. In
today’s world, people are fond of travelling through aviation and visit tourist destinations, if the
air transport is not provided properly with an affordable price then it can result in a decrease in
the tourist to certain destinations. Since aviation is one of the main foundations behind
globalization, driving the development of the modern world. Airlines, airports and air traffic
management link many major cities together with the small communities of the world 24 hours a
day. Fiji Airways is the national carrier for Fiji, previously known as the Air Pacific. Fiji
Airways operates internationally to 13 countries and 23 cities including Fiji, Australia, New
Zealand, Samoa, Tonga, Tuvalu, Kiribati, Vanuatu and Solomon Islands (Oceania), the United
States, Hong Kong and Singapore. The first commercial flight as Fiji Airways was made in 1951.
Fiji has got one international airport Nadi International Airport and 32 domestic airports.
Aviation not only supports the development of the country but it also provides employment to
hundreds of people. Aviation is important to Fiji’s economic security. The development of the
domestic airports plays a vital role in the development of the nation’s regional economies,
mainly in transporting tourists between the islands. Tourism through air accounts for about 25%
of the nation’s total gross domestic products. In Fiji, the growth of air traffic today has shown the
increase in the tourism and tourism wealth to Fiji’s economy which was less compared to less air
traffic in Fiji. The development taking place in the country today is because of the increase in the
tourist coming to Fiji. The aviation has made it possible for the tourist to come to Fiji with its
affordable airfares and the availability of airlines and accessibility.

Moreover, the main problem in the South Pacific Island countries is the low income for
households which are the barrier for the people of these developing countries to afford air fares
to fly to other destinations. In today’s world the standard of living is high therefore it is difficult
for many families to afford airline fares. The other reason can be the small volume of yield
which makes the operation of airline in the Pacific island difficult. Due to the small volume of
yield big international airlines cannot land in the country for which people have to go to another
country and catch another flight to reach their destinations using the fifth freedom of air but this
is bit expensive that is why there is less number of people from the South Pacific countries
travelling aboard. In the recent days, the changes occur rapidly in the international aviation
environment and the pacific aviation sectors which is not able to fully keep up with its pace.
Competitions among the pacific island countries are also increasing. The airlines compete by
decreasing there air fares compared to other airlines to attract more customers. The aviation
problems could be resolved in pacific island nations but not overnight, it will take time to get on
track.

In addition, the low cost carriers are also known as discounts or budget carrier, no frills in those
airlines which generally have lower fares with less comfort. These are usually offered to those
people who cannot afford high air fares. For some airlines having profitable airline, they have
high air fares. Even sometimes less competition means high air fares. During holiday seasons
there are usually an increase in customers travelling aboard therefore airline companies’ increase
their air fares. Fuel cost is also a reason for high fare cost. Through the introduction of low cost
airfares the passengers can enjoy low rates which will result in the increase of guest arrivals in
the country. The introduction of low cost carriers in Fiji will act as an additional substance for
regulatory rebellions where currently Fijis market is targeted.

However, according to the Wikipedia open skies is an international policy concept that calls for
the liberalization of the rules and regulations of the international aviation industry especially
commercial aviation in order to create a free-market environment for the airline industry. Open
skies are done in order to create a free-market environment for the airline industry. This allows
an unlimited access to all the destinations and routes of a particular country and quite often
includes no boundaries on intermediate and beyond traffic. According to
(http://www.pina.com.fj/?p=pacnews&m=read&o=208944121552329cb9839dc728c177)”Fiji
Airways’ Brattle Report, titled ‘Effects of International Air Transport Regulatory Liberalization
on Small Islands States’ is said to be a first of its kind to really look at how liberalization in the
airline business would affect small economies such as Fiji and those in the Pacific. The report is
saying what many in the field of Pacific aviation have long suspected to be true. That
deregulation to the extent of a full ‘open skies’ situation will potentially kill national airlines of
small islands states and cause instability in their international air services.” The introduction
reduces the air fare cost which makes it easier for people to easily afford the air price. It also
makes it efficient as open skies allows unlimited access to all the destinations of a country.

In addition to open skies policy, the transport problems can be addressed by understanding the
international laws for airlines, government to government plans to enable planned global
services. Air services clearances set out the routes which can be appreciative by airlines and the
amount of flights that may be functioned. The contracts also cover matters such as airlines those
which are entitled to use the rights negotiated and how prices are measured.

Finally, it can be said that Fiji is a tropical island nation located in the South Pacific Ocean and
includes an archipelago of more than 330 islands, of which 110 are permanently inhabited. Fijis
major key sector that supports Fiji’s economy are agriculture, forestry and tourism and these
contributes to the gross domestic products of Fiji together with foreign exchange from export and
provides employment. Due to isolation the tourism sector is affected badly and it also affects the
economy of Fiji and the development. Fiji Airways is the national carrier for Fiji. Open skies are
an international policy concept that calls for the liberalization of the rules and regulations of the
international aviation industry especially commercial aviation in order to create a free-market
environment for the airline industry. Open skies allows an unlimited access to all the destinations
and routes of a particular country and quite often includes no boundaries on intermediate and
beyond traffic. Open skies and aviation are interrelated to each other.
BIBLIOGRAPHY

 TS107 COUSRE BOOK, TOURISM IN THE SOUTH PACIFIC, STUDY GUIDE 1

 https://en.wikipedia.org/wiki/Economy_of_Fiji
 http://fijisun.com.fj/2017/02/24/tourism-is-the-future-driver-of-economic-activity-in-fiji/
 https://en.wikipedia.org/wiki/Aviation
 https://en.wikipedia.org/wiki/Open_skies
 https://en.wikipedia.org/wiki/Fiji_Airways
 www.investmentfiji.org.fj