[Deep Dive] How Air Tahiti Nui became an iconic and profitable boutique airline
The airline industry is a very competitive one. The traditional airline models – legacy and low cost – don’t always succeed, as we can see in the aftermath of any global crises. Air Tahiti Nui offers a glimpse into an alternate business model – a boutique airline that is also profitable.
In good times and bad, airlines often struggle to turn a profit. Air Tahiti Nui is a boutique airline that has carved a profitable niche for itself – one that’s deeply ingrained its Polynesian culture across touchpoints. Post-COVID-19, the aviation industry needs to look beyond traditional business models to thrive and Air Tahiti Nui provides a promising alternative. I travelled to Tahiti to find out. The result is this mini-documentary that we are releasing today based primarily on interviews with key executives.
What it’s like to fly Air Tahiti Nui
After a long late-night trek through the security and retails shops at Los Angeles Airport’s Tom Bradley International Terminal, both the kids (and us too!) were exhausted. It totally did not help that there were five or six international flights boarding from the same gate areas to cities ranging from Singapore to Hong Kong. The kids were now cranky. But as we squeezed through the crowds, we were pleasantly surprised to see the bright and cheerful uniforms the Air Tahiti Nui ground crew were wearing. After getting bussed to the aircraft, we finally boarded an aircraft adorned with tattoos!
As we stepped into the Tahitian Dreamliner, our stress melted away. The unique fragrance of a tropical flower emanated from the cabin. Instead of the typical sterile feel of an aircraft cabin, we encountered brightly coloured seats that resembled the ocean in some ways. As we passed through the galley, we noticed a huge decal of a beach in Bora Bora. Upon being seated, a flight attendant in a bright orange flower-adorned uniform brought us a basket of “tiare” flowers and handed one to each of us. The kids were smitten. Interestingly, this is the same flower that is visible on the tail of the airline’s aircraft. We felt we had been transported to Tahiti already! That’s what boarding a boutique airline feels like – the brand identity literally translates into the customer experience. None of this is a fluke. And all of it helps makes Air Tahiti Nui profitable.
Non-intuitive approach to driving profits
Most passengers have three choices to fly from the US to Tahiti – United Airlines, the low-cost long-haul French Bee and Air Tahiti Nui. It’s only the latter that you can expect people will pay a premium to fly, because of how differentiated the in-flight experience is. In fact, when the airline was configuring its brand new Boeing 787s, it chose to pursue a 2-2-2 configuration. This is non-intuitive since most airlines these days prefer configurations that provide direct aisle access to all passengers.
The executives at Air Tahiti Nui though had done their homework. They knew that most of the premium passengers flying into Tahiti couples who are on a once-in-a-lifetime trip to French Polynesia. Flying next to each other to them is more important than having direct aisle access. They could charge higher fares while maintaining a higher density cabin. That’s a rare combination, and certainly, one that drives profits.
Air Tahiti Nui powers the local economic engine
Air Tahiti Nui plays a major role in the economic development in French Polynesia to make sure that Tahiti stays connected with mainland France, but can also exploit regional opportunities to bring tourists from Asia, the Americas and the South Pacific to remote Pacific islands.
In fact, the airline was recently awarded the State contract to maintain essential service between Papeete and Paris when all airlines had cancelled flights in the immediate aftermath of COVID-19. That resulted in the world’s longest non-stop flight and also some very creative routings via Guadaloupe in the Caribbean, making the route completely domestic! The fact that Air Tahiti Nui is deeply integrated with the local ecosystem matters to be able to win this type of contract as it is easier for the airline given its small structure and local base in French Polynesia to offer the best service and prices to operate flights to and from Tahiti.
When I was in Tahiti doing the interviews, meeting the Tahitian people and generally experiencing the islands, there was something unique that I couldn’t put my finger on. Later, I found out that it’s called the “Mana” – the essence of Tahiti. I realized that it’s something that the airline truly brings through in its brand, customer experience and operations too. The Mana can be exemplified by something I noticed when I first landed in Tahiti from Los Angeles.
We landed at dawn. As we walked into the rustic terminal building, there was a man sitting before immigration, playing the ukelele. The kids woke up when they heard him play and we gathered around, not in a rush to exit. Shortly, our cabin crew walked past us and one of the male crew members decided to put his bag down and climbed the stage. He then joined the man playing the ukelele and they all sang together. I didn’t have a word to describe it then, but I guess this is Mana. Air Tahiti Nui brings Mana to the world. It’s what makes this boutique airline so successful and loved.
Air Tahiti Nui offers an alternative to the traditional airlines – it shows us how a boutique airline can leave a mark on its people and the world.