[Photo: File]

Fiji Airways is facing financial pressure despite recording about $1.85 billion in operating revenue last year.

Questions are now being raised in Parliament over its rising costs, losses and need for further government-backed borrowing.

Opposition MP Alvick Maharaj raised the concerns during debate on the government’s proposed $200 million guarantee for additional Fiji Airways borrowing.

Maharaj says the airline recorded about $1.8 billion in operating revenue and a pre-tax profit of $131.8 million in 2023.

However, operating revenue rose to about $1.85 billion in 2024, while Fiji Airways recorded a $25 million loss.

Maharaj questioned how the airline can generate record revenue while still requiring government-backed borrowing.

He singled out that operating costs rose to about $1.5 billion in 2024, putting further pressure on the airline’s finances.

Maharaj also raised concerns about foreign exchange risk. He points to an unrealised foreign exchange translation loss of $83.5 million on US dollar-denominated leases.

He questioned whether Fiji Airways had adequate measures to manage foreign exchange and other risks linked to international aviation.

Maharaj also questioned the airline’s network expansion and fleet commitments.

He said Fiji Airways had capacity for about three million seats, while Fiji was receiving around two million visitors.

Maharaj questioned whether the expanded network is leaving the airline with unnecessary costs without enough income growth.

However, Finance Minister Esrom Immanuel says soaring aviation fuel costs are largely driving the airline’s current financial pressure.

Immanuel told Parliament that Fiji Airways’ fuel bill increased by about $130 million in the second quarter of 2026 compared with the same period last year.

He described the fuel crisis as the biggest shock Fiji Airways has faced in more than 50 years.

Immanuel says the proposed $200 million guarantee is needed to meet the airline’s immediate liquidity needs and strengthen its financial resilience.

About $123 million would be used to replace cash currently restricted as collateral for standby letters of credit.

The remaining $77 million would support revolving working-capital facilities and help meet higher aviation fuel costs.

Immanuel says Fiji Airways is also taking steps to improve its financial position.

The Government maintains the airline is a critical strategic asset because of its role in tourism, trade, employment and international connectivity.

Parliament has unanimously approved the additional $200 million government guarantee.

The airline is now targeting a return to profitability next year.