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New Zealand and Australia are providing technical assistance to Tonga on winding up Royal Tongan Airlines (RTA) and briefing prospective operators, Foreign Affairs Minister Phil Goff said today.



RTA collapsed this week after a lack of funds forced it to halt its inter-islands services following the end of its international operations last month.



The South Pacific airline's local division stopped services and sacked 100 staff after the only aircraft it was still flying, which provided a domestic service, broke down and it could not find funds for repairs.

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Royal Tongan's international services were grounded in April when Royal Brunei Airlines repossessed a leased Boeing 757 airliner.



Mr Goff said the collapse could not have come at a worse time, with the main tourist season about to start.



"Without domestic services to the main tourist destination, Vavau, you can't get there," he told NZPA.



"So that is a major problem."



The New Zealand and Australian governments were providing Tonga technical assistance on how to wind up the airline and on briefing prospective operators, which included Air New Zealand.



Air NZ would have a delegation in Tonga next week for a briefing, Mr Goff said.



"While the New Zealand Government would obviously want to see alternative services put in place to avoid the disastrous economic effects of the loss of the tourist industry ... any airline that goes in is going to go in on a commercial basis and they've got to determine that it is commercially viable to do so," he said.



New Zealand and Australia hoped Tonga would emerge from the crisis as quickly as possible, and that "lessons can be learned from how and why the RTA collapsed".



The Tongan government said last week its financial involvement in the airline covered nearly 14 million Tongan pa'anga ($11.50 million) in capital commitments, bank guarantees and unpaid landing fees.



The government has pumped about 20 million pa'anga into the airline since its inception in 1985.



Mr Goff today said he believed RTA faced losses as high as US$20 million ($33.3 million).



- NZPA