Xinhua News Agency reports that the Fijian parliament approved on May 25 the motion for the government to guarantee the Fiji Airways borrowing of FJD455 million (about USD203.2 million).
According to Xinhua, Fiji’s Civil Aviation Minister Aiyaz Sayed-Khaiyum said in parliament that this includes domestic borrowings of up to FJD191.1 million and off-shore borrowings of up to USD117.1 million. And this will be valid for 3 years effective from May 30 this year.
Fiji Airways, the national airline, is feeling the full brunt of the COVID-19 impacts resulting in job losses, the grounding of flights and this cannot continue, he said, adding that the government guarantee will keep Fiji Airways up and running, Xinhua relays.
Xinhua relates that the minister said that despite earning near-zero revenue, the national carrier has to pay monthly fixed costs of FJD38 million and this comprises of aircraft loans and leases of FJD20.2 million, employee costs, fixed payments for aircraft maintenance, and other costs totalling FJD6 million.
Fiji Airways will also be exempted from paying the guarantee fee, the report relays.
Xinhua says Fiji Airways has recently extended the suspension of international flights through to the end of June, and is in the process of reducing scheduled flights for July and August.
A 20 percent permanent salary reduction has been implemented for all retained employees effective June 1, 2020.
According to Xinhua, Fiji Airways also announced in a statement that it has decided to lay off more than 700 staff members including all cabin crew and all 79 expatriate pilots from May 25.
Eight expatriate executives have also had their employment terminated, with five expatriate staff remaining, including the CEO Andre Viljoen, the report relates. The airline has six local executives, who will all retain their jobs and now constitute the majority of the leadership team.
The national carrier said that it has done the workforce adjustments as a consequence of the current and foreseeable operating environment, Xinhua relays.
“The adjustments are necessary and unavoidable as the COVID-19 crisis endures, causing the further suspension of scheduled international services and ensuring that the airline will receive virtually zero revenue in the coming months,” the national carrier said.
Tourism is the backbone of the Fijian economy, and it is dependent on a strong and sustainable national carrier. Fiji Airways said that it will be vital in leading Fiji’s economic recovery post COVID-19, the report adds.
Fiji Airways (formerly Air Pacific) is the national carrier of the Republic of Fiji and is majority-owned by Fiji’s National Provident Fund. Based at Nadi International Airport, Fiji Airways provides a network of domestic and international services that spans the Pacific, North America, Asia, New Zealand and Australia. The carrier operates a mixed fleet of Boeing and Airbus aircraft.