Air Tahiti Nui Losing Money On All But One Route, May Restructure Network

Air Tahiti Nui is a lovely little airline, operating a fleet of four Boeing 787-9s from French Polynesia. I’ve always had pleasant flights on the airline (dating back to when the company operated Airbus A340-300s), though I can’t say I’ve put much thought into the carrier’s financials.

So it’s interesting to note that Air Tahiti Nui is reportedly considering making some major changes, in order to reduce losses. Let me explain…

Air Tahiti Nui losing money on nearly all routes

For context, Air Tahiti Nui operates out of Faa’a International Airport (PPT), and flies to Auckland (AKL), Los Angeles (LAX), Paris (CDG), Seattle (SEA), and Tokyo Narita (NRT). The Paris service is operated as a continuation of the Los Angeles flight.

In 2024, the airline had an operating loss of around 2.8 billion XPF (27.3 million USD). That might not sound massive, but that was on revenue of 34.3 billion XPF (332.2 million USD). So a margin of around negative 8% isn’t exactly great.

What’s interesting is how performance breaks down by route. The Los Angeles route is the only one that’s profitable, as it generates around 1.1 billion XPF (10.7 million USD) in profits annually. Everything else is sort of a mess. Looking at 2024 performance:

• Seattle generated a loss of 1.68 billion XPF (16.3 million USD)
• Tokyo Narita generated a loss of 875 million XPF (8.5 million USD)
• Auckland generated a loss of 274 million XPF (2.7 million USD)
• Paris generated a loss of 212 million XPF (2.0 million USD)

As you can see, the Seattle service loses an absolutely massive amount of money in comparison to the rest of the network, while the Tokyo Narita service has an average load factor of under 50%.

Now, I should emphasize that Air Tahiti Nui is owned by the government of French Polynesia, and of course a major motivation of the airline is to bring tourists to the region. Despite that, it’s clear that the government isn’t happy with the level of losses, plus the constantly increasing debt, as the carrier’s cumulative deficit is now up to 22 billion XPF (214.9 million USD).

How could Air Tahiti Nui may update its network

So, how could Air Tahiti Nui improve its profitability? Strategy consulting firm Arthur D. Little has presented the airline board with a recommendation, which would basically see the airline completely transform its network.

The recommendation calls on the airline to cut its service to Seattle and Tokyo as soon as possible, given the huge losses. Meanwhile the service to Auckland and Paris is basically considered breakeven, so would be maintained.

The recommendation is for Air Tahiti Nui to instead launch flights to Honolulu (HNL), San Francisco (SFO), and Sydney (SYD). What’s the logic for that?

• Honolulu would be a shorter distance to fly, as it’s only 2,731 miles from Tahiti; in theory there could be more connectivity through Alaska and Hawaiian, though the geography isn’t necessarily ideal, since Honolulu is almost directly north of Tahiti
• Sydney would largely be about also competing more in selling tickets between Sydney and the West Coast of the United States; however, the airline flew to Sydney in the past, and the route lost money
• San Francisco has more origin & destination demand for Tahiti than Seattle does, but it’s also more competitive, with both French Bee and United operating in the market

The presentation also has some fleet planning recommendations, suggesting the airline either keep its fleet of four Boeing 787-9s, or instead switch to a fleet of around six Airbus aircraft, including four A330-900neos and two A321XLRs.

I don’t know what the solution here is, but a few thoughts:

• Given Air Tahiti Nui’s deficit issue, completely replacing its relatively modern fleet probably isn’t the way to go, and the airline should probably focus on what it can do with existing aircraft
• Being an airline based on a remote island with limited hotel capacity isn’t easy, since there’s always going to be a cap on how many potential tourists there are
• The competition from North America to French Polynesia is strong, between Air France, French Bee, Hawaiian, and United (Delta just canceled its Tahiti service)
• I’ve always felt like a merger and/or better integration between Air Tahiti Nui (the long haul carrier) and Air Tahiti (the regional carrier) would help out the airline, since it would give it a competitive advantage with people looking to reach their final destination in French Polynesia

Anyway, we’ll see how this all plays out, since ultimately the airline is owned by the government, and is there to promote French Polynesia tourism. So any network changes have to be carefully weighed, and factor in the impact they’ll have on tourism.

Bottom line

Air Tahiti Nui is losing money on every route it operates, except its service to Los Angeles. In particular, the airline is losing the most on its flights to Seattle and Tokyo Narita, while the flights to Auckland and Paris are delivering mild losses.

It looks like the airline is hoping to improve its financial performance, and this might include a full overhaul of its route network. One consulting firm recommends the airline cut its two very unprofitable routes, instead adding service to Honolulu, San Francisco, and Sydney.

It’s anyone’s guess how this plays out, though it does seem likely that at least the Seattle route will be cut sooner rather than later, since the losses on that route alone more than wipe out the profits of the carrier’s only lucrative route.

What do you make of Air Tahiti Nui’s financials, and what kind of a restructuring are you expecting?