Parliament has approved Economy Minister Aiyaz Sayed-Khaiyum’s motion asking the government to guarantee Fiji Airways loans totaling $455 million.
This includes domestic borrowings up to FJ$191.1 million and foreign borrowings up to US$117.1 million.
This will be valid for 3 years from May 30.
Sayed-Khaiyum says the FNPF is providing a loan of $53.6 million, the Reserve Bank of Fiji through the Export Finance Facility loan will lend $75 million to the Development Bank of Fiji, which will then retrocede to Fiji Airways because the RBF cannot make a direct loan.
It will be at a rate of 3%, ANZ grants $52 million loan, Bred Bank grants $10.5 million loan, DAE Capital grants a 9-month lease deferral of the two 20.2 million A-350s dollars, Avalon grants a 9-month lease deferral of the $10.1 million A330-300s, GCash has granted a nine-month lease deferral of two $8.9 million Boeing Max 8s, the agency export credit company KfW IPEX-Bank also grants a 12-month loan repayment deferral on the Max 8 which is $22.2 million.
Sayed-Khaiyum says the Asian Development Bank will also provide a $50 million loan. He says the ADB levy will not take place until the situation extends into next year.
He told Parliament that despite near zero revenue, Fiji Airways faces monthly fixed costs of $38 million, which includes $20.2 million in aircraft loans and leases, staff costs, fixed payments for aircraft maintenance and other costs totaling $6 million.
He says that in addition to fixed costs, ongoing flight suspensions and cancellations are contributing to increased customer refunds and even though tickets are sold as non-refundable, Fiji Airways is forced to refund customers as the service n is not provided at all.
He adds that all expatriate pilot contracts have been terminated and most Fijian pilots except five will get their jobs as they will need them and when they have good news on international travel these pilots will be used to fly our planes.
While contributing to the motion, SODELPA MP Aseri Radrodro said that the manner in which this motion was presented to parliament is questionable and raises doubts about the intentions of the motion.
National Federation party leader Prof. Biman Prasad says we should guarantee this loan as we have no options.
However, Prasad says there are some pertinent questions that need to be answered about Fiji Airways’ profits before the COVID-19 pandemic.