Cooks pays Air NZ $5m to keep Rarotonga route

Air New Zealand has reached a deal with the Cook Islands Government over the Los Angeles route. Photo / Brett Phibbs

The Cook Islands Government has settled on a figure with Air New Zealand which will see the airline continue to fly its Los Angeles route through Rarotonga.

Pacific Island states such as Samoa and Tonga are also facing cuts from next year in weekly services unless they bump up their subsidy to the airline to the tune of millions.

A loss of flights could see revenue from tourism and exports fall dramatically for all three countries.

Samoa's Deputy Prime Minister Misa Telefoni has said Air New Zealand is holding his country to ransom and has approached rival airlines about flying the Los Angeles route through Apia and Tonga.

He was not available yesterday to say whether Apia had agreed to Air New Zealand's demands.

But Cook Islands Tourism Minister Wilkie Rasmussen said his country had agreed to a new joint venture, to be signed within two weeks.

It is understood the subsidy is $5 million, up from $2 million.

Mr Rasmussen said the flights were important to secure access to visitors from North America, the UK and Europe.

He refrained from criticising Air NZ and instead placed the negotiations in the context of the world economic crisis. "All over the world airlines and tourism organisations are scrambling to make sense of the present global economic situation that is affecting everyone."

Air NZ would not comment on the specifics of the deal.