Fiji Airways is facing a sharp increase in fuel costs and renewed financial pressure, prompting a FJ$200 million government guarantee and debate over the airline’s wider importance to tourism and the economy.
Fiji Airways has found itself at the centre of an intense economic debate after a FJ$130 million increase in its fuel bill added to pressure on the national carrier’s finances.
The Government sought and received parliamentary approval for an additional FJ$200 million guarantee to support the airline’s borrowing and liquidity requirements.
Finance Minister Esrom Immanuel described the increase in aviation fuel costs as Fiji Airways’ biggest fuel shock in more than 50 years.
Around FJ$123 million of the guarantee will replace cash currently restricted as collateral against standby letters of credit, while the remaining FJ$77 million will support revolving working-capital facilities and help absorb elevated fuel costs.
The latest pressures come despite substantial operating revenue.
Fiji Airways recorded about FJ$1.85 billion in operating revenue in 2024 but posted a FJ$25 million loss. A further consolidated loss of FJ$40.3 million followed in 2025, and another substantial loss is projected for 2026.
The airline had previously suffered cumulative losses of about FJ$666 million between 2020 and 2022 when international travel collapsed during the pandemic.
Government ministers argue the airline cannot be viewed purely through the lens of its balance sheet.
Deputy Prime Minister Manoa Kamikamica warned that cutting Fiji Airways services by 20 to 30 per cent would affect tourism, business travel, investment and the wider economy.
He described the carrier as a lifeline for Fiji, reflecting its role in bringing visitors into the country and providing international and regional connectivity.
The debate has also extended to the proposed five per cent Tourism Services Tax, which the Government says would help support Fiji Airways amid higher operating costs. The tourism industry has expressed concern about the potential effect on Fiji’s competitiveness.
The episode highlights a fundamental economic reality for Fiji: aviation is not simply another industry.
As an island economy heavily dependent on international tourism, trade and mobility, reliable air links form part of the country’s essential economic infrastructure.
The challenge is ensuring that strategic importance is matched by commercial discipline, transparency and a sustainable financial model.
