Fijivillage
NEWS SPORTS

Government to guarantee Fiji Airways loans totaling $455 million

Government to guarantee Fiji Airways loans totaling $455 million

By Dhanjay Deo
Monday 25/05/2020
Minister for Economy Aiyaz Sayed-Khaiyum

Parliament has approved the motion by Minister for Economy Aiyaz Sayed-Khaiyum for the government to guarantee Fiji Airways loans totaling $455 million.

This includes domestic borrowings of up to FJ$191.1 million and off-shore borrowings of up to US$117.1 million.

This will be valid for 3 years effective from May 30th.

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 Fiji Development Bank which will then on-lend to Fiji Airways as RBF cannot do direct lending.

This will be at a rate of 3 percent, ANZ is providing $52 million in lending, Bred Bank is giving $10.5 million in the loan, DAE Capital is providing 9 months rental deferral of the two A-350s of $US20.2 million, Avalon is providing 9 months rental deferral of the A330-300s of $10.1 million, GCash has provided nine months rental deferral of two Boeing Max 8 of $8.9 million, KfW IPEX-Bank export credit agency is also providing 12 months loan repayment deferral on Max 8s which is $22.2 million.

Sayed-Khaiyum says the Asian Development Bank will also provide a loan of US$50 million. He says the ADB draw-down will not take place unless and until the situation prolongs into next year.

He told parliament that despite earning near-zero revenue, Fiji Airways has to pay monthly fixed costs of $38 million and this comprises of aircraft loans and leases of $20.2 million, employee costs, fixed payments for aircraft maintenance, and other costs totalling $6 million.

He says in addition to the fixed costs, ongoing flight suspensions and cancellations are contributing towards increased customer refunds and even if tickets are being sold as non-refundable, Fiji Airways is obliged to refund customers as the service is not being delivered at all.

He adds that all expatriate pilots’ contracts have been terminated, and most of the Fijian pilots except for five will have their jobs as they need them and when they get any good news on international travel, these pilots will be used to fly our planes.

While contributing to the motion, SODELPA MP Aseri Radrodro said the manner in which this motion has been brought to parliament is questionable and raises doubts about the intentions of the motion.

Aseri-sm

National Federation Party Leader, Professor Biman Prasad says we should guarantee this loan as we do not have any option.

Biman-Prasad-sm

However, Prasad says there are some pertinent questions that need to be answered about Fiji Airways' profits before the COVID-19 pandemic.

Stay tuned for the latest news on our radio stations

CFL radio frequencies
IN DEPTH
SODELPA spectacle
With SODELPA going through changes and opposition within the party, we give you all the stories that covered these ...
11 days ago

USP Saga
Full coverage of the USP saga including coverage of protests, investigations, reports and ...
11 days ago

Fiji's approach to deal with effects of the COVID-19 Pandemic
As Fiji battles against the spread of the COVID-19 pandemic, many individuals and organisations have come forward to lend a helping ...
75 days ago
FEATURE NEWS
Catholic Church in Fiji to respond to allegations of sexual abuse against children
The Head of the Catholic Church in Fiji Archbishop Peter Loy Chong says the church will be issuing a formal statement tomorrow in response to allegati...
12 hours ago
LATEST NEWS
75 police officers graduate from Basic Recruits Course
Minister for Defence, National Security and Policing Inia Seruiratu has conveyed his appreciation for the operations conducted by the police officers ...
10 hours ago

3 people involved in Caubati accident taken to CWM hospital
Three people who were involved in a car accident in Caubati, Nasinu this afternoon are undergoing medical treatment at the CWM Hospital. Two ...
12 hours ago

PM stresses leadership lacks compassion in Fiji
Prime Minister Voreqe Bainimarama stresses that leadership lacks compassion in all sectors. Bainimarama highlighted this while speaking to the ...
12 hours ago

17 Special and Inclusive Education Schools receive 50 boxes of cleaning agents
Seventeen Special and Inclusive Education Schools in Fiji have received 50 boxes of cleaning agents donated by Newline Chemicals to help protect ...
14 hours ago

Woman who allegedly stole vehicle arrested in Nabua
A 23-year-old woman who allegedly stole a vehicle from Navua yesterday has been arrested at Nabua Muslim League settlement. She allegedly stole ...
14 hours ago

TOP