03 June, 2020

Fiji Airways extends grounding of International flights until end of July and secures

Fiji Airways, Fiji’s national airline, has announced the cancellation of all international scheduled flights through to the end of July. The cancellations are due to prolonged border closures and travel restrictions as a consequence of the COVID-19 Pandemic. The airline had announced the cancellation of June international services earlier this month. A limited number of domestic Fiji Link services will continue to operate.

Mr Andre Viljoen, Fiji Airways Managing Director and CEO said: “Given that there is still next to no demand for international air travel in the region, regrettably, we have been forced to cancel our July schedules, with further reductions expected in August 2020. Most of our international fleet remains in storage, except for aircraft utilised for freighter services. These services are keeping vital supply lines open between Fiji and its key trading partners. Border restrictions will need to ease in order for travel demand to return and international services to resume.”  

Fiji Airways is contacting impacted guests who are booked to travel in July. Guests booked through travel agents and third parties will be contacted by those parties.

The airline also recently secured vital support from the Fijian Government, in the form of sovereign guarantees to support urgent financing actions required to tide the company through the COVID-19 crisis, and the expected slow ramp up of travel demand thereafter. The bulk of the airline’s international services have been cancelled through to the end of June 2020, with further reductions expected in July and August. These cancellations, caused by the prolonged COVID-19 Pandemic, have caused revenue to dry up, whilst monthly fixed costs remain.

The sovereign guarantees will be issued by the Fijian Government in support of FJ$ 450 million-worth of initiatives aimed at bolstering the airline’s cash reserves, including payment deferrals, and new long-term debt financing.  

Mr Andre Viljoen, Fiji Airways Managing Director and CEO said: “With effectively no travel demand and therefore no cash flowing into the business, our primary focus since March has been the preservation of cash reserves, negotiating payment deferral arrangements with aircraft financiers, lessors, and suppliers, and raising new debt finance.”

“We are extremely grateful to the Fijian Government for standing behind Fiji Airways and providing these guarantees, without which these financing initiatives would not be possible, and Fiji Airways would not survive.”

Fiji Airways will continue operating dedicated freighter services to support the vital supply chain for Fiji’s export sector, and more generally to support the Fijian economy as a whole. These freight services have greatly benefitted primary producers, farmers, fisherfolk, workers, exporters and consumers.

Between 1 April to 14 May, the airline carried over 1000 tonnes of freight between Fiji and key trading partners like Australia, New Zealand, the United States and Hong Kong. Just over 622 tonnes of freight carried were exports, comprising of fresh produce (75%), garments (14%), Kava (6%) and seafood (3%). Inbound freight consisted of consignments important to Fijian businesses, as well as essential supplies like vaccines, test kits, medical supplies and humanitarian aid.   

Mr Viljoen added: “Governments around the world have publicly acknowledged the important role airlines play, both in terms of providing an essential service (transportation) and facilitating tourism and trade, and have taken action to ensure that airlines survive the COVID-19 crisis. Similar support has been provided by various governments, even for legacy national carriers which are now privatised. We are grateful to the Fijian Government and the Fijian people for recognising the vital role of Fiji’s national carrier.”

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