Fiji Airways’ decision to cut costs on food and catering rather than reduce its flight capacity was highlighted in Parliament, with former Deputy Prime Minister Professor Biman Prasad saying the airline should reconsider aspects of its cost-cutting measures.
Professor Prasad says food remains an important component of Fiji Airways’ services and that concerns raised over the airline’s cost-cutting measures were legitimate.
He says the $200 million Government guarantee and other support in the package should allow Fiji Airways to redirect its cost-cutting measures without bringing disrepute to the airline or the services it provides to the public and the tourism industry.
Deputy Prime Minister and Minister for Tourism Viliame Gavoka says Fiji Airways chose to cut costs in areas such as food rather than reduce its flight capacity.
Speaking in Parliament during debate on the proposed $200 million Government guarantee for Fiji Airways, Gavoka says most of the complaints Fiji Airways received about food came from local travellers.
He says tourists generally accepted the changes to food services as part of the environment in which international airlines were operating.
Gavoka adds that if Fiji Airways had maintained catering consistent with oneworld standards, the airline would have had to reduce some flights.
He says Fiji Airways instead decided to cut costs in areas such as food while maintaining its flight capacity.
Gavoka says Fiji Airways’ decision was significant given Fiji’s strong tourism performance.
He says Fiji had exceeded one million visitors on a rolling June-to-June basis and could also reach one million visitors on a calendar-year basis.
Meanwhile, Professor Prasad clarified that the proposed $200 million Government guarantee did not mean Government was handing Fiji Airways $200 million, explaining that Government was guaranteeing a loan that Fiji Airways would borrow based on its own borrowing capability and who it dealt with.
Professor Prasad also supported calls for greater transparency and accountability in the management of the airline, saying Parliament needed to be able to question Fiji Airways about its financial management.
He says questions about the airline’s management and cost structure remains important, although some were legacy issues.
Professor Prasad also highlights the wider 2026-2027 support package for Fiji Airways, which includes extending the period for carrying forward the airline’s tax losses from eight to 15 years, around $10 million in waived fees and charges for 12 months, and the temporary five per cent tourism services tax.
He also acknowledged concerns raised by tourism operators over the implementation of the five per cent tourism services tax and said he expected the Fiji Revenue and Customs Service and Ministry of Finance to work with hotels and tourism operators to address any difficulties.
