Taxpayers exposed to $1.33b Fiji Airways debt

The Government is preparing to put another $200 million behind Fiji Airways, pushing its total guaranteed debt exposure to $1.33 billion and raising fresh concerns over the financial risks facing taxpayers.

Finance Minister Esrom Immanuel told Parliament yesterday that the additional guarantee would increase Government’s guaranteed debt exposure from $1.1315 billion to $1.3315 billion, equal to 9.5 per cent of Fiji’s Gross Domestic Product (GDP).

The three-year guarantee, effective from August 1, 2026 to June 30, 2029, would allow Fiji Airways to secure additional borrowing without paying a guarantee fee.

“Airline needs the money to deal with immediate cash-flow pressures, including high aviation fuel costs,” Mr Immanuel said.

Of the $200 million, about $123 million would replace cash currently tied up as collateral, while another $77 million would provide revolving working capital.

The move comes as Fiji Airways continues to face financial pressure.

The airline suffered a $666 million cumulative loss during the COVID-19 period before returning to a $121 million profit in 2023.

However, that recovery has since reversed, with the airline recording a $25 million loss in 2024 and an unaudited $42.3 million loss in 2025.

“Its cash reserves also fell sharply, from $256.8 million in 2024 to $135.1 million in 2025,” Mr Immanuel said.

He noted that the situation had been worsened by soaring fuel costs, with Fiji Airways’ fuel bill increasing by $113 million in the second quarter of 2026 alone compared with the same period last year.

But he also warned that Government could not continue supporting the airline indefinitely and said the guarantee should come with measures to strengthen its financial position.

Opposition MP Alvick Maharaj said the Opposition would support the guarantee, but with reservations.

He questioned the airline’s financial management and warned that taxpayers should not be treated as an “open-ended ATM” for a commercial operation.

Mr Maharaj also questioned spending on sponsorships, expansion and other costs while the airline was seeking another government-backed borrowing facility.

Government said Fiji Airways expects to return to sustainable profitability by 2027, supported by cost-cutting measures, route optimisation and other reforms.

But if the airline defaults, the Government would be liable for the guaranteed borrowing.