Government seeks $200m guarantee for Fiji Airways amid financial pressure

The Fijian government is seeking parliamentary approval for a substantial $200 million guarantee to bolster Fiji Airways, the nation's flag carrier, as it grapples with mounting financial pressures. The proposed guarantee, intended to be valid for three years from August 1st, 2026, to June 30th, 2029, aims to support the airline's borrowing capacity and exempt it from guarantee fees.

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Fiji Airways is a critical strategic asset, carrying around 70 percent of visitor traffic into Fiji and providing key international and domestic air connectivity.

Finance Minister Esrom Immanuel highlighted Fiji Airways' critical role as a strategic asset, responsible for approximately 70 percent of visitor traffic and essential air connectivity, both internationally and domestically. The government, holding a 51 percent stake, views the additional guarantee as vital for addressing the airline's immediate liquidity requirements and enhancing its operational resilience. Of the total amount, $123 million would be used to replace restricted cash collateral, while the remaining $77 million would bolster revolving working capital facilities and help manage the escalating costs of aviation fuel.

Aviation fuel has become the airline's single largest operational expense, with its fuel bill surging by about $130 million in the second quarter of 2026 compared to the previous year. This request follows significant cumulative losses of around $666 million between 2020 and 2022 due to the COVID-19 pandemic. Although the airline rebounded with a profit of $121 million in 2023 after borders reopened, it subsequently recorded audited consolidated losses of $25 million in 2024 and $40.3 million in 2025, with further significant losses projected for 2026.

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aviation fuel remains Fiji Airways’ single largest operational cost, with the airline’s fuel bill increasing by around $130 million in the second quarter of 2026 compared with the same period last year.

Despite these financial challenges, the government maintains Fiji Airways' indispensable contribution to tourism, trade, employment, foreign exchange earnings, and regional connectivity. Additional support measures have already been introduced, including extending the tax loss carry-forward period and waiving fees. A temporary five percent tourism services levy on eligible tourism operators is also expected to generate around $70 million for the airline starting September 1st. However, Immanuel cautioned that the government's continuous support capacity is limited, emphasizing that the new guarantee is contingent upon the airline implementing stringent financial strengthening measures, including cost reductions, operational efficiencies, potential divestment of non-core assets, and network optimization.

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the Government’s ability to support the airline continually is limited.