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Fiji Airways pays loan in advance

Felix Chaudhary
Wednesday, February 12, 2014

FIJI Airways has been making loan repayments to the Fiji National Provident Fund six months in advance.

And FNPF CEO Aisake Taito said the airline company was expected to pay out the $181million plus interest ahead of schedule.

He said they were also talking about repaying the loan in full in advance.

Mr Taito said the loan made to the national carrier was done with due diligence and stringent monitoring processes to ensure the airline had the capability to meet lending requirements.

"Members don't have to worry," he said.

"The whole reason we invested in Fiji Airways was based on a strategic decision that was made because of our interests in resorts like the InterContinetal Fiji Golf Resort and Spa, Holiday Inn and the soon-to-be opened Grand Pacific Hotel."

Fiji Airways managing director and CEO Stefan Pichler acknowledged the FNPF for its assistance in enabling the airline to purchase three new Airbus A330-200 aircraft.

"We have been making payments ahead of schedule as a result of our current good cash flow and expect to complete the pay-off of the loan in time," Mr Pichler said.

"I'm unable to comment on the specifics of our commercial arrangement but I will add that the FNPF is a very valued strategic partner."

This newspaper queried whether the airline would look to FNPF to secure funding for the purchase of new aircraft as outlined in Fiji Airway's five-year growth plan.

"We are in the early stages of our aircraft market assessment and have so far received overwhelming feedback of international finance institutions.

"Our five-year growth plan to sustainable profitability seems to attract many offers and once we have finished our internal evaluations of the very best offer for each additional aircraft, we will know who our financing partners will be."

The FNPF lent $181m to the then Air Pacific at an interest rate of 8.75 per cent.

The loan generated $12m annually for FNPF members.

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