NFP questions deal for Fiji Airways to manage Fiji Airports Ltd - Why the secrecy?
July 22, 2022
“Why the secrecy? It’s like asking Dracula to guard the blood bank”.
National Federation Party Leader Professor Biman Prasad made the comment following the appointment of Fiji Airways to manage Fiji Airports by the Economy Minister Aiyaz Sayed-Khaiyum when he announced the 2022-23 Budget last Friday.
Professor Prasad also likened this announcement to a major supermarket chain managing a very large manufacturer and supplier of basic food and essential items that is being sold by the supermarket chain.
The NFP Leader asked whether Fiji Airways, as part of its management contract, was getting rid of Fiji Airports executive management to clear the path to appoint its own hand-picked personnel.
He said this is a relevant question because nobody, “apart from Fiji Airways, the Economy Minister and for all intents and purposes the Fiji Airports Chair” know what Fiji Airways will do.
“And will this management contract also eventually extend to airport ground handling services, that are currently provided by Air Terminal Services Ltd or ATS?”
“ATS is a company in which the employees are 49% shareholders while Government has 51% shares in what has been Fiji’s unique business arrangement of employee participation for more than 41 years?”
“This announcement by the Economy Minister while handing down the 2022-23 Budget means that a customer will now manage a supplier”.
“Fiji Airports charges Fiji Airways for the services it provides, including landing and parking fees for aircraft. Like all other services, Fiji Airports looks at its costs and works out how to operate at a profit”.
“Now its customer, Fiji Airways, will be looking at its costs and deciding (in the name of “management) how much Fiji Airways should pay in landing and parking fees”.
“Also, Fiji Airways may be deciding, as the largest user of the airport, how big a discount it should get compared to other users such as Air New Zealand, Virgin and Jetstar. An airline is now able to look at the costs of its airport services supplier and control its operations”.
“The reason this has happened is because the Government has been trying to find a large international airport operator to run Fiji Airports but cannot find an international operator. Instead, everything is handed to Fiji Airways”.
“Fiji Airways knows how to use airport services but not how to supply them. It doesn’t have the necessary skills to do that. But of course it will be charging a fee for this management contract – which will drive more money into Fiji Airways’ coffers to increase its profits”.
“Things are becoming more and more distorted with these ever-increasing conflicts of interest”.
We will have more to say on this during the budget debate in Parliament beginning Monday 25th July”.