French Polynesia's domestic airline has rescinded its plan to drop more than half of its routes.
Last month, Air Tahiti said it would no longer fly to 26 islands because of the financial impact of the Covid-19 pandemic.
The announcement angered the government which warned that it would set up a new airline.
However after talks with the carrier's management, the government said an agreement was reached allowing for services to all 46 destinations to resume from 7 July.
The government agreed to subsidise the carrier with $US4 million allowing it to keep all its staff.
Air Tahiti, which is 14 percent government-owned, had said most routes were operated at a loss and without support from the government would be abandoned.
The move was decried as an attempt to take the population of entire islands hostage.