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Flying business in the Pacific


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Not just for the tourists -- Palau's new airline provides vital services for businesses.
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Palau
Micronesia
Air Transportation

(CNN) -- When business travelers think of a regional carrier that is crucial to the economy of a handful of nations, they likely imagine an airline with thousands of staff and a fleet of a hundred planes.

Palau Micronesia Air, with its small crew and one Boeing 737 airplane, is a far cry from that picture.

But this recently launched airline is already becoming vital to a remote collection of islands dotting the Pacific Ocean.

Flights to these small islands are a lifeline for business, delivering newspapers, magazines, medical supplies and food, as well as other crucial supplies.

Already Continental Micronesia, a division of the U.S. carrier Continental Airlines, services this region. Now there is more competition on routes to Palau with the launch of a domestic airline.

Competitive airfares on Palau Micronesia Air for local and regional destinations are also proving attractive to travelers -- a strategy that follows other airlines such as AirAsia and looks set to keep the airline flying.

The problem for with small airlines such as Palau Micronesia Air is having enough backup. Like Air Nauru, the new carrier has just one plane, and if anything goes wrong with that plane the airline essentially is out of business.

This is one of the reasons why there is talk of expanding the airline already. The founder says the carrier plans to acquire a second aircraft next year for direct flights between Palau and Japan. It is also eyeing Hawaii.

Palau's first national carrier is the brainchild of local businessmen Alan and Glenn Seid who started the airline partly to bring more travelers and tourists to Palau.

"We are probably one of the leading dive resorts in the world. The potential is so great (for an airline), the question was -- why not?" Alan Seid told CNN.

"I always dreamed as a young boy of starting a Palauan national carrier some day and so I pursued this dream."

The Seid brothers came up with the idea for an airline just before September 11, 2001 and the SARS epidemic.

"When things are in the worst case scenario it creates greater opportunities -- the lease costs of the aircraft were the lowest in history," explains Seid.

"We recognized that if you had everything ready and then started, when the economy started surging, we would benefit from the rise."

They enlisted local partners, raised the money with support from the governments of the Federated States of Micronesia, and struggled through bureaucratic regulations and inspections.

The airline and its logo, featuring the full moon from Palau's flag and four stars representing the four Federated States of Micronesia, made its first appearance on the Pacific island of Guam, September 21.

The first flight was in a leased plane from a Swedish company using experienced pilots from Australia and New Zealand, as well as newly trained Palauan cabin staff.

The airline now flies to Guam, Manila in the Philippines, Darwin in Australia, as well as a handful of closer destinations in the Pacific such as Chuuk and Yap.

-- CNN's Mike Chinoy contributed to this report.


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