Fiji Airways stuck with leased aircraft

Fiji Airways has been told it will not be able to return the newly-leased million-dollar aircraft sitting unused at Nadi Airport because of complex binding agreements.

Last November, the airline took delivery of its first Airbus A350XWB which cost more than $US100 million.

In January, flights began to Sydney and Los Angeles but by the end of March, the airline was forced to suspend air travel due to the Covid-19 outbreak.

This week, the airline's chief executive, Andre Viljoen, said the situation was like "sitting with a noose" with no way to wriggle out.

Mr Viljoen said defaulting on loan or lease repayments for one aircraft could make Fiji Airways "lose everything and go belly up".

He said the national carrier needed almost $US18m a month to meet its "recurring costs" and the aircraft they had leased and bought, cost anywhere from $US100m to $US300m.

Returning the aircraft was simply impossible, Mr Viljoen said, referring to the signed agreement between the airline, financial institutions and the leasing company.