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.
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.”
A day earlier Fiji announced that it was making 758 employees, equivalent to 51% of its total workforce, redundant and is also in discussions with its lenders and aircraft lessors for loan and lease payment deferrals and arranging debt finance from a number of financial institutions.
At the time of the news Viljoen said: “This is a very difficult announcement, and one we are only making after exhausting all other options. The sad reality of prolonged flight suspensions means that we simply do not have work for a large segment of our workforce now, and for the foreseeable future. We have no other option but to terminate the employment of staff to whom we cannot provide work, which is an unfortunate but vital step we must take in order to protect our cash position and to preserve as many jobs as possible for those staff who the business needs in order to function today.”
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.
Airline
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