Palau tourism boom drives expansion of Australia air link

Palau’s booming tourism recovery is giving its direct air link with Australia a major boost.

The Palau Paradise Express will now operate until at least November 2027, with Qantas adding a second weekly Brisbane-Koror flight from December to meet rising demand.

The service has carried more than 15,400 passengers since it launched in 2024, helping Australian visitor numbers to Palau surge by 68 per cent in the first seven months of this year.

Australian Prime Minister Anthony Albanese announced the extension during the Pacific Islands Forum Leaders’ Meeting in Koror after meeting Palau President Surangel Whipps Jr on Tuesday.

“Palau is a close friend of Australia,” Albanese said. “This announcement will allow more Australians to visit this stunning Pacific holiday destination and ensure connections between our countries grow even stronger.”

He said the service had become an important part of Palau’s economy.

Australian Prime Minister Anthony Albanese meets Tuvalu's Prime Minister Feleti Teo in Palau as Fiji's Foreign Minister Sakiasi Ditoka looks on. Photo/Fiji government

“The Palau Paradise Express is a significant contributor to Palau’s economy and this expansion will deliver a steady boost for tourism and business operators across the region.”

The route is being extended as Palau records a strong tourism recovery.

More than 51,000 visitors arrived between January and July, up 27 per cent on the same period last year. Australia was one of the fastest-growing markets with arrivals up 68 per cent.

Visitors arrive at Palau International Airport as the country’s tourism industry continues to recover, with Australian arrivals up 68 per cent in the first seven months of 2026. Photo/Thomas Tarurongo Wynne

The growth shows what direct air links can mean for Pacific economies where tourism is a major source of income.

Australia’s Minister for Pacific Island Affairs, Pat Conroy, says the popularity of the route is also about bringing Pacific neighbours closer.

“Palau is a great place to visit, and that’s why this route has been so popular. I’m pleased more Australians will now be able to get there easily on the Paradise Express.

"This is about building stronger connections with Pacific neighbours, at the same time as boosting Palau’s economy through tourism.”

Whipps said when the service began in 2024 that the link was about more than tourism.

“We appreciate Australia for partnering with us to promote economic activity between our two nations," he said.

Pacific leaders are welcomed to Palau during the official opening of the 55th Forum Week in Koror. Photo/Pacific Islands Forum

"The flight makes it easier for tourists and businesspeople to travel between our two nations and encourages trade and commerce.”

Whipps said it also created opportunities for education, workforce training, and stronger people-to-people ties.

Qantas Group CEO Vanessa Hudson says the second weekly flight will help meet demand during Palau’s peak season.

“As the national carrier, we're proud to be working with the Australian Government to keep Australia and Palau connected,” Hudson said in a statement.

“A second weekly service in the peak season means more Australians can experience one of the Pacific's most extraordinary destinations, and more visitors for the local tourism operators who depend on them.”

But while the Palau route is a success story, Pacific aviation faces a much bigger challenge: how to keep vital air links operating when costs are high and markets are small.

Listen to Travel Agents Association chief executive Julie White's full interview on Fiji's Tourism Services Tax below.

The pressure is also being felt in Fiji where the government has changed how its new five per cent Tourism Services Tax will apply after concerns from the tourism industry and travel groups in Australia and New Zealand.

The tax came into effect on Tuesday but will not be applied retrospectively to bookings confirmed before 31 August.

David Tohi, Secretary-General of the Association of South Pacific Airlines, says Pacific airlines operate in a difficult environment.

“Small markets, high costs, infrastructure and resourcing challenges, lack of access to capital, and not a lot of margins for error.”

New Zealand Foreign Affairs Minister Vaovasamanaia Winston Peters has previously said investment in air links can pay off for Pacific economies.

“I was providing them $3 million a year to make sure the flights went to the Cook Islands, and they've gone from there to now having 175,000 visitors a year coming,” Peters told William Terite on Pacific Mornings.

Watch Winston Peters' earlier interview below.

“That's the kind of story we want to see over and over again in the Pacific. It can be done, and it's inspiring.”

But Solomon Airlines Commercial Manager John Wopereis says airlines still face pressure to keep services running to smaller and more isolated communities.

“There's only so many ways we can respond when we're relying on government as well; it's quite a big challenge for us," he told media.

For Palau, Whipps says the immediate focus is on making the most of the extra capacity as the country’s tourism industry continues to recover.

The twice-weekly Brisbane-Koror service will begin in December.