Fiji Airways lays off workers, seeks urgent loan

The Fiji Parliament will be today asked to urgently grant a government guarantee for  a loan to keep Fiji Airways afloat, as the adverse impacts of the COVID19 pandemic begin to bite on the national airline.

Attorney General and Fiji’s economy minister Aiyaz Sayed-Khaiyum says the airline needs a loan of up to US$227.5 million, about FJ$455m. 

This afternoon parliament will consider the following motion:

“Hon. Attorney General and Minister for Economy Civil Service and Communications to move that Parliament approve

 (a) that the Government guarantee the Fiji Airways borrowings consisting of a mix of domestic borrowings up to FJ$191.1 million and offshore borrowings up to US$117.1 million with a total limit of approximately FJ$455 million valid for a period of three (3) years effective from 30 May 2020, and; (b) that Fiji Airways be exempted from paying a guarantee fee.” 
The motion is expected to go before Fiji’s parliament when  the session reconvenes after their lunch break, and with the ruling Fiji First Party’s majority, the motion is expected to be passed.

It comes as a total of 758 employees of Fiji’s national airline, Fiji Airways, have been terminated effective from today in the wake of the adverse impacts of the COVID19 pandemic which has grounded the airline’s fleet.

Those being sent home reportedly included all Fiji Airways cabin crew, representing about 51 per cent of total workers in Fiji Airways. Others who have lost their jobs are all of Fiji Airways’ 79 expatriate pilots, and eight expatriate executive managers. 
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 had broken 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 per cent 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 per cent 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,” wrote Viljoen 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.
*This story was updated at 2.56pm Fiji time to reflect details of the parliamentary motion.