Fuel price rise, strong US dollar hit Fiji Airways
IN July 2019, Fiji Airways faced a forecasted full-year operating loss of around $100 million compared with a full-year operating profit in 2018 of FJ$50million.
This was highlighted by Attorney-General and Minister responsible for Civil Aviation, Aiyaz Sayed-Khaiyum, while addressing Parliament recently.
The A-G highlighted that Fiji Airways Group, which includes Fiji Airways the national airline, the domestic operator subsidiary Fiji Link and a 38.75 per cent stake in the Sofitel Fiji Resort, earned a profit before Tax for the year ended December 31, 2019 of FJ$ 61.2 million in FY19, compared to FJ$ 55.3 million for the previous financial year.
“By July 2019 Fiji Airways faced a forecasted full-year Operating Loss of around FJ$100 million (compared with a fullyear Operating Profit in 2018 of FJ$ 50 million).”
“This dramatic decline in forecasted financial results was caused by the impact for the year of further fuel price increases (FJ$29 million), impact of the stronger US Dollar exchange rates on all US dollar costs (FJ$ 11 million), and most importantly the expected negative impact on profits resulting from Qantas commencing direct flights from Sydney to Nadi from 31 July 2019 (FJ$65 million).”
The A-G added that the significance of turning a full-year forecasted operating loss of FJ$100 million in five months to an operating profit of FJ$61.2 million, is way more than just being profitable.
“It speaks volumes about Fiji Airways and Fiji Links Leadership and Board. Were it not for Qantas reducing the number of code share passengers placed on Fiji Airways in 2019 by 99,000 (compared with 2018), growth for 2019 would have been eight per cent as opposed to two per cent.”
Meanwhile, the A-G said despite all these projections our national carrier is an essential part of our economic infrastructure.
“We cannot give such a critical piece of our economy away to a foreign interest. Just look at Qantas, they have an interest in Fiji Airways, but they have not contributed a single cent during this crisis.”