Qantas-Air Pacific used as proxy fight between Australia and Fiji

Qantas and Air Pacific have been caught in a proxy fight between their home countries as Australia condemns the ongoing lack of democracy in Fiji since military leader Frank Bainimarama took control of the island nation last decade. Bainimarama in turn has had the civil aviation ministry pass a decree requiring, amongst other statutes, Fijian airlines to have local citizens comprise two-thirds of the board. Fiji has a 51% stake in Air Pacific while Qantas holds a 46% stake and accounts for four of the nine board seats.

While it is apparent Qantas will have to relinquish a board seat to comply with the new regulations, the carrier for some years has been seeking to sell its stake - and would surrender all board seats - but Fiji is unwilling to spend the AUD15 million that Qantas' stake is valued at. Fiji is also irritated that Qantas' LCC Jetstar serves Fiji, to Air Pacific's detriment, although Virgin Australia has significantly more capacity.