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Fiji government to support troubled national airline

The Fijian Government used its majority in parliament this week to fast track the passing into law of two bills aimed at assisting its financially troubled national airline as a result of the adverse impacts of the COVID-19 pandemic.

Over two days, a bill granting a government guarantee for a US$2227.5 million loan for Fiji Airways was tabled and passed. Parliament also passed a bill amending the country’s employment laws that offers some relief to employers who are forced to put off workers due to the COVID19 impacts.

These amendments included the inclusion of World Health Organisation pandemic declarations as ‘Acts of God.’

Attorney General and Fiji’s minister of economy Aiyaz Saiyed-Khaiyum said the loan would be sourced locally and from abroad, and the bulk will assist the airline with its plane purchase or lease repayments.

The swift passage of bills comes as the 758 employees of Fiji Airways prepare to take their employer to court for their mass termination early this week.

Those sent home include all cabin crew members, eight expatriate executive managers and 79 expatriate pilots, about 51% of Fiji Airways’ total workforce.

Airline CEO and Managing Director Andre Viljoen is among the five executive managers that retain their jobs, alongside six local executives.

 While termination letters were sent out to affected employees today, MD Viljoen broke the news in his weekly newsletter to staff last Friday (22/5).

 He also confirmed that remaining staff will undergo a permanent pay cut of 20%, effective 1 June 2020, which he said would see staff working between two to five days per week. They will only be paid for actual days or hours worked.

The termination will result in savings of 50% in company’s payroll costs, he added.

“For months now, we have been negotiating daily with financial institutions and aircraft lessors for new debt financing and payment deferrals which will allow us to stretch the cash reserves we have, during a period of zero incoming revenue,” Viljoen wrote to staff.

“Simply put, our revenue has effectively dried up, but our monthly fixed costs and financial obligations remain.”

 Like other airlines, Fiji Airways had grounded its fleet of eleven aircraft, which comprises two Airbus 350, four Airbus 330, and five Boeing 737, while its domestic subsidiary Fiji Link operates three ATR planes and three Twin Otters.

The airline this week announced the cancellation of all international scheduled flights through to the end of July.

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