Fiji Airways is technically insolvent
Monday 24th August 2020
Aiyaz Sayed-Khaiyum is living in a fantasy world when he talks about Fiji Airways. He says it is “irresponsible” to talk about its possible bankruptcy. But that is exactly our airline’s future.
He has criticised other political leaders for raising the possibility. He says it is “unprofessional” for the media to publish these statements.
But Fiji Airways is already technically insolvent. As the Minister is fond of saying, this is “the reality of the matter”.
Parliament has guaranteed that Fiji Airways will pay back $450 million worth in loans and lease deferrals. This will keep it going for a short while. But Fiji Airways is spending $38 million each month for its planes to sit on the ground.
At that rate, this $450 million will finish in less than one year.
The Economy Minister thinks his so-called “Bula bubble” will return things to normal. He is living in a dream world. He needs to look around him. Virgin Australia, Air Mauritius and South African Airways are now in liquidation.
Global aviation business will be below 2019 levels for several years. Even when its flights resume, Fiji Airways will keep losing money.
So what will happen when the $455 million runs out? Maybe the Minister has not thought about this. Maybe he does not want to think about it.
As always, the Minister is only interested in the politics and the show. He is not interested in the substance. He is not interested in the airline or the people in it.
He talks in hundreds of millions of dollars. But Fiji Airways did not even pay the few million dollars to which its laid-off workers are entitled as redundancy payments. Is this “responsible”? Is this “professional?”
The taxpayers of Fiji are bailing out Fiji Airways. They are entitled to debate and discuss its future. And they are entitled to know what will happen when the $455 million runs out.
Professor Biman Prasad