Fiji Airways rejects allegations of insolvency
August 27, 2020 12:43 pm
Fiji Airways has rejected negative assertions about the state of the airline. [File Photo]
Fiji Airways has rejected negative assertions about the state of the airline.
The airline has today set the record straight in response to what it calls baseless and incorrect statements about its financial solvency and position.
Chief Executive Andre Viljoen, says they’re extremely saddened by the ongoing detrimental assertions about the airline.
He says lessors and financiers have the utmost confidence in Fiji Airways’ financial position, evidenced by payment deferrals and new loan facilities.
However, he adds that it is very damaging to their reputation to have false allegations circulating through certain media outlets.
Viljoen says the ongoing cost savings and cash preservation measures from March include aircraft loan and rental payment deferrals.
He says these have reduced their monthly costs of $38 million by about 50% to around $20 million until June 2021.
The chief executive clarifies that most of the aircraft loan and rental payment deferrals range from nine to 12 months and are repayable over three to six years.
Fiji Airways new loans repayment terms range from six to 15 years, with interest-only payments required for the first two years.
Viljoen adds these financing actions put us in the best possible position to get through this crisis.
He says the forecast for the airline’s cash reserve requirements are based on their ‘Worse Case’ scenario, which anticipates an extended period of border closures and a very slow ramp-up of travel demand thereafter. The chief executive has assured that these scenarios have been independently validated by a leading international merchant bank and aviation consultancy.
Viljoen adds they are working hard to get “Travel Ready” and “Commercial Ready” to bring the maximum number of passengers to Fiji when border restrictions ease-up.
The airline has engaged with the hotels through a special task force to create substantially discounted holiday packages using the Fijian Government’s Recovery Rebate Package Programme travel stipend and many tax reductions to entice the maximum number of visitors back to Fiji from any market that opens up.
The Fiji Airways CEO has further clarified that there is also a misunderstanding regarding the $455 million Government Guarantees.
He says this is not a cash bailout using taxpayer funds provided to Fiji Airways by the Fijian government.
He adds the financiers providing the new loans and the aircraft loan and rental deferrals have undertaken their own due diligence and have satisfied themselves that Fiji Airways can repay their obligations going forward.
Viljoen highlighted that government’s guarantees, provide the additional security and comfort for these loans and deferrals.
In light of the recent heightened interest in Fiji Airways, Viljoen confirmed he will host a series of briefings in Suva and Nadi for premier customers and the business community in the coming weeks.