Lulutai Airline aircraft Photo: Facebook.com/Lulutai Airline Ltd
A former Tongan prime minister says that the country's troubled government-owned airline, Lulutai, has enough assets to cover its debts.
Hu'akavameiliku Siaosi Sovaleni, who resigned last December ahead of a no-confidence motion against him, was responding to comments from his successor, Aisake 'Eke, that Lulutai Airlines was in a financial mess.
Last week, Eke and the Minister of Public Enterprises Piveni Piukala both stated that the government had ordered a review of Lulutai's operations and financial standing, with the view to winding up the company.
Speaking to reporters in Nuku'alofa on Monday, Hu'akavameiliku, who was chairman of the airline's board, said the domestic airline can get out of the difficult situation that it currently finds itself in.
Hu'akavameiliku, his deputy Samiu Vaipulu, and his civil aviation minister Sevenitini Toumo'ua, who were also directors of the airline, told the media the airline had been paying off debts to the Retirement Fund Board, which owns 27.19 percent of the company's shares.
The government holds the balance of the shares.
Hu'akavameiliku said that Lulutai has paid back TO$800,000 of its TO$6 million loan.
"Lulutai has only one debt to the Retirement Fund, and $5.7 million in principal and interest is the amount left," he was quoted as saying by Matangi Tonga.
He said Lulutai "has sufficient assets to cover its debt."
'Eke and his government had sacked Lulutai chief executive Poasi Tei, and replaced him with local businessman Tevita Palu, a director of Palu Aviation and Real Tonga in Nuku'alofa, two weeks ago.
The government said Palu will lead a review of the airline's operations.
In response to claims that Lulutai was asking the government for a new TO$7 million grant, Hu'akavameiliku said that was not true.
He said the company was seeking a loan that would be repaid.
Lulutai has been in the spotlight since it began its operations four years ago.
