The managing director of Air Rarotonga, Ewan Smith, says the Cook islands domestic market is too small to be opened up competition.
The government is encouraging airline operators to apply for licences to service domestic routes as fares to outer islands are high.
But Mr Smith says fares to the Northern Group are more than 1000 New Zealand dollars each way because those islands have small populations.
"We've been operating to the Northern Group for the last 25 years. And last year we really came to the point where we had to increase prices substantially just to recover costs which were just running away, particularly with fuel. And we've run those services up there more as a social duty than as a business. It's just unrealistic that a competitive service would operate on those routes."
