Fiji Airways says 2018 to be challenging year amid higher fuel prices

written by Gerard Frawley | March 28, 2018

A Fiji Airways Airbus A330-200. (Airbus)
A Fiji Airways Airbus A330-200. (Airbus)

Fiji Airways chief executive Andre Viljoen says the rising cost of fuel will be one of the airline’s major challenges for 2018 after posting a fourth straight year of record profit in calendar 2017.
The airline group, which covers Fiji Airways, Fiji Link and other subsidiaries, reported profit before tax of FJ$95.8 million (A$61.3 million) for the 12 months to December 31 2017, up 13.4 per cent from $FJ84.5 million (A$54.1 million) in the prior corresponding period.
It was the fourth year in a row the company posted a new record high full year profit before tax.
Revenue rose 12.5 per cent to FJ$825.3 million, Fiji Airways said in a statement on Monday, while passenger numbers increased 14.3 per cent to 1.6 million.
Fiji Airways chief executive Andre Viljoen said it was the record result was a “massive achievement” by all involved at the company.
“I couldn’t be more proud of the way the team surpassed all key metrics for revenue, passenger and network growth, efficiently navigating through a challenging operating period in which cost control was crucial,” Viljoen said in a statement.
However, Viljoen described the outlook for the current year as challenging amid the higher oil prices, increased competition, and volatility of the US dollar.
“Fuel prices will continue to be a challenge for all airlines and we will not get complacent with the fiscal discipline required to meet our financial targets,” Viljoen said.
Crude oil prices have risen from US$45 a barrel in mid-2017 to currently sit close to US$70 a barrel.
Fiji Airways expanded its network in 2017 with new flights to between Adelaide and Nadi, added more services to San Francisco and Singapore, as well as increased frequencies to various Pacific Island destinations.
And there is more growth to come in the current year, with Nadi-Tokyo Narita nonstop flights to begin on July 3.

FIRST 737 MAX 8 DUE IN NOVEMBER

An artist's impression of the Boeing 737 MAX 8 in Fiji Airways livery. (Fiji Airways/Boeing)
An artist’s impression of the Boeing 737 MAX 8 in Fiji Airways livery. (Fiji Airways/Boeing)

In terms of the fleet, Fiji Airways will become the first operator of the Boeing 737 MAX in the Oceania region when it takes delivery of the first of five 737 MAX 8s on order in November, with a second to follow in December.
The aircraft will replace the existing 737s in the fleet, comprising one 737-700 and four 737-800s, that are used on short- and medium-haul routes to Australia, New Zealand, Hawaii, Kiribati, Samoa, Solomon Islands, Tonga and Vanuatu.
“It will, however, be an exciting year for Fiji Airways as we become the first airline in the region to receive and operate the brand new Boeing 737 MAX 8 aircraft on our short-haul markets of Australia, New Zealand and the South Pacific,” Viljoen said.
Fiji Airways will have a 12-month head start on operating the MAX in Oceania, with Virgin Australia not expected to receive its first MAX until the end of 2019. Meanwhile, Air Niugini was due to get the first of four MAX 8s in 2020.
Aviation thinktank CAPA – Centre for Aviation said in a research note the MAX represented a 19 per cent increase in total seat count for Fiji Airways’ narrowbody fleet, given its MAX 8 would have 185 seats compared with 164 seats in its four 737-800s and 122 seats for the sole 737-700.
“The impact of the capacity increases from the 737 MAX will mainly come in 2019, given that the first MAX 8 will not enter service until late 2018,” CAPA said.
“Fiji Airways is not currently considering the launch of any new regional international routes. However, the MAX 8s will enable the airline to increase capacity on several of its short and medium haul routes.”
It has also previously been reported Fiji Airways planned to take delivery of a fifth A330 in mid-2018, which would enable the start of flights to Tokyo Narita.
Currently, the airline’s widebody fleet comprises three A330-200s and one A330-300 and Fiji Airways said it was “embarking on an evaluation campaign to select a widebody jet aircraft type to augment and/or replace” the existing Airbus A330 fleet.
Fiji Attorney General and Minister of Economy, Aiyaz Sayed–Khaiyum said it was critically important for the country to have a “very healthy national carrier”.
“Fiji Airways has again proved itself to be a star player in Team Fiji. And the warm congratulations of every Fijian goes to the Fiji Airways management and staff,” the Minister said.
“You have become role models for every enterprise in Fiji of what can be achieved in our workplaces with cooperation, collaboration, focus and hard work.”
Fiji Airways said its efforts on improving the passenger experience led to customer complaints falling by 66 per cent, while compliments rose 22 per cent, compared with the prior corresponding period.
While Fiji Airways is majority government owned, Qantas holds 46 per cent of the airline. A number of governments in the South Pacific also have small stake in the airline formerly known as Air Pacific.

VIDEO: Adelaide Airport welcomed Fiji Airways’s inaugural flight in July 2017 with an Airservices Aviation Rescue and Fire Fighting (ARFF) monitor cross, as this video on the airport’s Facebook page showed.

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9 Comments

  • Salesh

    says:

    Well done F1J1. How about Newcastle to Nadi?

  • Robin Nair

    says:

    Another excuse for Fiji Airways to raise fares. The Fiji Airways operates in a virtual monopoly enviroment and on top of that, it is subsidised by the taxpayer. Its fares per kilometer is perhsps one of the highest in the world!

  • Ashnil Prasad

    says:

    It’s cheaper to go to USA most of the time. We only go. Back because our relatives live there and we originate from there. Put prices down Fiji airways u not competitive have a monopoly

  • Neil

    says:

    Air Pacific used fly Canberra to Nadi for short while which was quite good. How about Fiji Air restarting the route again with new Max’s.

  • Y Naidu

    says:

    Congratulations to Fiji Airways. Well done to all the workers. Keep up the good work. The airline is going in the right direction. Consider next route to Delhi, India. Maybe start with a weekly service. Everybody should be proud for the Fiji national airline as it does compete with Virgin and Jetstar.

  • ian

    says:

    We used to fly to USA via Fiji every year, with a few nights stopover everytime, but fares for next January seem very high compared to nonstop on Virgin.
    The bula bids program, where you can bid for an upgrade on long haul sector from Fiji to LAX or SFO from $865 is fantastic.

  • ian

    says:

    Neil,
    Apart from CBR, FJ used to fly to OOL.
    They could reintroduce either at any time, as those airports are not subject to bilateral like BNE, SYD, MEL, PER, ADL.

  • tom

    says:

    Neil,
    For Canberrans, changing flights at NAN is much easier than at awful SYD.
    eg. if FJ flew CBR/NAN, they could go CBR/LAX or SFO without need to change terminals, just a very short walk. Maximum of about 50 metres. No stupid buses or trains & no congestion at NAN airport either.

  • James

    says:

    Salesh
    Newcastle can’t even support old flights to nz.

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