The Tongan government has dropped its One Domestic Airline Policy.
Peau Vava'u Airways and Airline Tonga, which are both running domestic services, have now been given the right to continue their operations.
The government introduced its one airline policy in 2004, which resulted in the termination of a second operator, FlyNiu and controversially gave Peau Vava'u, an airline owned by Crown Prince Tupouto'a, a monopoly.
However the Director of Civil Aviation, Villiame Ma'ake, says a parliamentary committee was set up to look into how to improve services because Peau Vava'u could not meet expectations.
Airlines Tonga was brought in temporarily at the beginning of the year to meet the shortfall in services.
Mr Ma'ake says it was seen to be more beneficial for the kingdom if two airlines are present.
"A recommendation was made to government not to go back to the one airline policy, that the environment, economy and what-have-you, was considered much better with two airlines operating."