Fiji Airways has rejected what it describes as injurious media speculation about its financial health.
”Fiji Airways is not insolvent by any definition of the word, whether you look at our cash flow or our balance sheet,” managing director and chief executive, Andre Viljoen said in a statement on 27 August.
“Whilst our lessors and financiers have the utmost confidence in Fiji Airways’ financial position, evidenced by the fact that they have recently supported us with payment deferrals and new loan facilities, it is nevertheless very damaging to our reputation to have such false allegations circulating throughout the media.”
Viljoen says that measures targeted at lowering costs and preserving cash, implemented from March, have allowed the airline to progressively reduce its monthly recurring fixed costs from F$38 million ($18 million) to around F$20 million, through to June 2021.
These measures include aircraft loan and rental payment deferrals, which range from nine to 12 months and are repayable over three to six years. Repayment terms on new loans range from six to 15 years, and in the first two years, require interest-only payments.
“These financing actions put us in the best possible position to get through [the Covid-19 crisis],” says Viljoen.
He notes that the projections for the airline’s cash requirements are based on a scenario where borders remain closed for an extended period and travel demand ramps up very slowly thereafter.
In the same statement, Viljoen clarifies the nature of F$455 million in government guarantees the company is due to receive, stating that these are “not a cash bailout using taxpayer funds”.
He says: “The financiers providing the new loans and the aircraft loan and rental deferrals have undertaken their own due diligences and have satisfied themselves that Fiji Airways can repay their obligations going forward. The Fijian government’s guarantees, which we are extremely grateful for, provide the additional security and comfort for these loans and deferrals.”
He adds that the government has previously guaranteed large loans for other government-related entities and as required by the law, these need parliamentary approval, with all relevant details disclosed.
Viljoen also says that the airline is collaborating with hotels to create substantially discounted holiday packages, while working on getting operationally and commercially ready to restart passenger operations once border restrictions ease.