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16 September, 2019

Fiji Airways CEO warns Qantas’ “aggressive” move into Fiji will damage local economy

Fiji Airways CEO has spoken out against Qantas’ expansion into the Fiji market, labelling the national carrier’s actions as “aggressive”.

Andre Viljoen, Fiji Airway’s CEO, said Qantas’ “aggressive push” into Fiji will damage local economies and communities in the South-Pacific region, who are dependent on tourism trade from Fiji Airways.

Qantas introduced four direct flights a week to Fiji in January and confirmed to Travel Weekly it would run daily direct flights for two weeks during Christmas and New Years.

Qantas also operates codeshare agreements on the majority of Fiji Airways services between Australia and Fiji and owns a 46 per cent share in the airline.

“It is certainly alarming when your major shareholder and long-standing commercial partner all of a sudden becomes your major competitor,” Viljoen said in a statement obtained by Travel Weekly.

“Historically, this partnership has been a win-win for both parties, so you can imagine our surprise when Qantas announced, in January this year, that it would be commencing its own services to Fiji in competition with Fiji Airways.”

According to Viljoen, Qantas’ move doesn’t make sense from a commercial point of view, as they have entered the market at a time when Australian visitor arrivals in Fiji are flat, and the new services have created overcapacity and diluted yields.

“Conversely, by operating its own services, at its cost and risk, we estimate that Qantas will struggle to turn a profit on the route. This brings into question the entire commercial rationale,” Viljoen said.

“Qantas’ sudden flip from ally to adversary has been very damaging for Fiji Airways. It is competing aggressively, actively directing passengers onto Qantas and Jetstar services.

“It is very difficult for a small pacific island national carrier to compete with the substantial market power and financial capability of Qantas which, frankly, dwarfs the resources and capability of Fiji Airways.”

Fiji Airways has met with Qantas to voice its concerns, with Qantas citing increased connectivity for its own passengers as the key reason for its expansion.

“Our analysis has shown that, with the exception of some marginally improved connection times, the Qantas services do not create any meaningful new connections,” Viljoen said.

A Qantas spokesperson told Travel Weekly the daily service over Christmas and New Years will provide more seats, “helping to boost visitor numbers which ultimately supports the Fijian economy”.

But according to Viljoen, Fiji Airways is a vital contributor to the Fijian economy and regional tourism.

“The economic impacts on Fiji Airways this year are already apparent, and forecast figures present a worrying trend,” he said.

“The public should be aware that this race to the bottom only stands to damage the economic stability of one of their favourite holiday destinations, to the great detriment of the Fijian people.”

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