Fuel Prices Could Force Fiji Domestic Airline to Close

Excerpt from report by privately-owned owned national daily newspaper Fiji Sun website on 12 June

Increasing fuel prices could force the closure of the country’s largest domestic airline. Air Fiji Ltd chief executive officer Sialeni Vuetaki said the airline had been hard hit by the increasing fuel prices. In addition it has been forced to abide by the permanent arbitrator’s ruling that it removes all cost cutting measures.

“Our future looks bleak as fuel costs are increasing by the day,” he said. “Now we have no other option but to follow the ruling made by the permanent arbitrator on the case. With that we cannot go on with our operation and the next option is to close down. Everything is falling heavily on us.”

Mr Vuetaki said the company needed to cut back on operational costs before they would close down.

The closure of the company could see 209 airline workers lose their jobs. The airline owns 11 aircraft which compromise a nine- seater BN-2 Islander, Banderante, DHS-Twin Otter and Chinese-made Y- 12 Habin.

Transport Workers’ Union general secretary Kamlesh Kumar said Air Fiji’s financial mess should be blamed on the current management.

“While we welcome the airline’s decision to abide by the ruling, the threat to close down the operation is really ill-conceived,” he said.

Mr Kumar said during the hearing Air Fiji had blamed many factors including the 2006 coup and the introduction of domestic carrier Pacific Sun as reasons for the cost-cutting decision.

“Air Fiji made those cost cutting decision in March 2007 and after that the airline had making losses,” Mr Kumar said. “The huge one was in November 2007 where it made a loss of 0.5m dollars. This just shows the airline’s financial status was in a mess and also the calibre of the management team.”

Mr Kumar said earlier that the union was willing to find a possible solution through dialogue. The union had filed for a trade dispute case against Air Fiji after the airline breached the terms of their collective agreement. [passage omitted]

Originally published by Fiji Sun website, Suva, in English 12 Jun 08.

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