Fiji Airways (FJ, Nadi) will obtain a USD50 million loan from the Asian Development Bank, the archipelago nation's economy minister, Aiyaz Sayed-Khaiyum, confirmed during a press conference on August 22. He also blasted shareholder Qantas for competing with the carrier and condemned negative recent media reports about the Fijian airline.
Sayed-Khaiyum was speaking the day after Fiji Airways announced a FJD61.2 million Fijian dollar (USD28.7 million) profit before tax for the year ending December 31, 2019.
As part of its full-year financial statement, the company said that it “increased passenger numbers by 2% despite the significant impact of Qantas commencing flights from Sydney Kingsford Smith to Nadi in March 2019.”
“Qantas entered the market at the start of an already sluggish off-season period, and the resultant excess capacity negatively impacted yields. Loss of market share to Qantas, together with the drop in yields, dramatically reduced the profitability of our Australian operations, resulting in a negative impact on profitability of around FJD65 million [USD30.5 million].”
Fiji Airways parent Air Pacific Group is owned by the Fijian government (51%) and Qantas (46.32%). Fiji Airways currently operates from Nadi to Sydney 2x weekly, according to the ch-aviation Commercial Aviation Operator Capacity Data module, but Qantas no longer operates to Fiji.
“We as the largest shareholder were deeply concerned that the second-largest shareholder, which is Qantas, was actually competing with the very company in which it holds at least 46% of the shares. It's actually unheard of,” Sayed-Khaiyum said at the press conference according to broadcaster FBC News.
“It's an airline which is far bigger, with far deeper pockets and a much bigger network throughout the world. Yet despite that, Fiji Airways was able to compete with them, recover from a [projected loss], and return a profit.”
Sayed-Khaiyum also called comments made by “various politicians” about Fiji Airways’ current financial situation “irresponsible”.
“I mean you have one politician here issuing a statement saying the national airline is facing liquidation and bankruptcy due to an inability to repay loans. How highly irresponsible is that?” he said according to the Fiji Times.
As previously reported, last week Mahendra Chaudhry, leader of the opposition Fiji Labour Party, criticised parliament for approving a “massive post-covid-19 bailout” of the carrier worth FJD455 million (USD215 million), while politician Ro Filipe Tuisawau called for a inquiry into recent aircraft acquisitions.
Fiji Airways commented in its financial statement that it “is now focused on survival, given the devastating and ongoing impacts of the covid-19 pandemic on global aviation.”
Finally, Sayed-Khaiyum lambasted the media for negative reporting about Waqavuka Financing. The minister has repeatedly had to explain why the Fijian government established this Dublin-based firm, a special purpose company that acts as a third party on behalf of Fiji Airways in its dealings with financial institutions.
In February, he told the parliament that the company existed as a form of security if Fiji Airways falls behind in repaying loans obtained to purchase aircraft, the Fiji Sun reported at the time. He explained: “Fiji Airways on a monthly basis repays the loans into the special company, then the company disburses the repayment money to the consortium of banks.”
At this week's press conference, the minister stressed that details about Waqavuka Financing was public knowledge.
“We have repeatedly, repeatedly provided information in parliament. In fact I had an entire ministerial statement on Waqavuka Financing Limited and some of you media organisations chose not to run it. This information is available in the public space and at the parliamentary level, but people have chosen not to run with it or be ignorant about it. All these issues that are coming up now are people looking for political mileage.”
