The administrative court of French Polynesia has ruled in favour of a budding airline which challenged its operating licence.
Islands Airline wanted the licence to exclude a phrase according to which the government determines the conditions of operation.
The court has now upheld an expert opinion which suggested the government's powers were too broad.
The airline obtained its licence last October only after the administrative court in Papeete ruled that the government's inaction amounted to an attempt to protect a monopoly held by Air Tahiti.
Earlier, the transport minister said he feared the new airline would fly its jets only to the most lucrative destinations and leaving public service flights to be provided by Air Tahiti.
Islands Airline is a project of a New Caledonia-based businessman Bill Ravel, who also founded Air Calin.