Pacific air travel could change dramatically if recommendations from an Australian study of transport in the region are implemented.
An interim report on the study was given to Pacific Economic Ministers who met in Rotorua this week.
The Australian Treasurer Peter Costello says the region has high transport costs and 20 regional airlines, very few of which are making any money and some of which have recently collapsed.
He wants to see a rationalisation of the air market and the adoption of commercial principles.
"There could the opportunity to open up economically sustainable aviation services around the Pacific, but it won't be done whilst there is anything like the number of competing airlines, government ownership and loss making activities as is occurring at the moment"
Australian Treasurer Peter Costello, who also says it may be necessary for subsidies to be provided on loss making routes.