Fiji Airways (FJ, Nadi) will receive support from a new 5% tourism services tax under Fiji's 2026-2027 national budget, alongside a planned government guarantee and other relief measures, according to the budget presented by finance minister Esrom Immanuel.

The temporary tax will take effect on September 1, 2026, and apply to hotels and tour and cruise operators with annual turnover of FJD2 million Fijian dollars (USD890,000) or more.

Immanuel said it is expected to raise about FJD70 million (USD31.1 million) over 12 months, with all proceeds ringfenced for Fiji Airways. He said the carrier has come under financial pressure from higher aviation fuel prices while continuing to recover from pandemic-related losses.

The budget also includes a planned FJD200 million government guarantee (USD89 million), subject to parliamentary approval, an extension of the airline's tax loss carry-forward period from eight to 15 years, and a waiver of about FJD10 million (USD4.4 million) in fees and charges for the next 12 months.

Immanuel added that the government is working with Fiji Airports, Air Terminal Services, the Civil Aviation Authority of Fiji, the Fiji National Provident Fund, and the Fiji Development Bank to ease pressure on the carrier.

"While the global aviation industry continues to navigate elevated fuel prices, supply chain pressures and rising operating costs, this support positions us to strongly continue growing and maintaining maximum seat capacity into Fiji at a time when many international airlines are scaling back services and reducing capacity," Fiji Airways managing director and chief executive Paul Scurrah.

Suva flights unlikely

Separately, Scurrah said Fiji Airways will not reinstate direct international services to the capital city of Suva without government support, despite its airport being capable of handling the airline's larger aircraft. He said the barrier is commercial viability rather than infrastructure, although the airline would consider the route under a formal government support arrangement.

Regional subsidiary Fiji Link (FJA, Nadi) currently serves Suva with ATR42-600, ATR72-600, and DHC-6-400 turboprops. Suva has a 1,868-metre runway, compared with the 3,273-metre runway at Nadi, Fiji's main international gateway. The two airports are on opposing ends of Fiji's largest island.