10 Dec 2012

Air Marshall Islands ordered to clear retirement fund debt

6:32 pm on 10 December 2012

The same week that Air Marshall Islands officials announced plans to buy another aircraft, the High Court ordered the government airline to pay more than one point four million US dollars in back taxes to the nation's retirement fund.

Chief Justice Carl Ingram says there is no dispute over the amount Air Marshall Islands owes in retirement and health fund taxes for the period from early 2011 through September this year.

The figure includes penalties for lack of payment.

Judge Ingram says the airline is legally obligated to pay the contributions but also has a moral obligation.

Earlier in the week, airline officials announced plans to buy a Dornier 228 aircraft for the same amount, 1 point 4 million dollars.

But the purchase has sparked controversy, with airline board members angered that politicians made a decision to buy an aircraft that is old and a model the airline had already found not suitable for the Marshall Islands environment.