FIJI Airways has so far paid $92 million of its $146 million loan for the pre-delivery payment (PDP) funding of the three A330s aircraft it acquired in 2013.
This was revealed in Parliament yesterday by Attorney-General and Aviation Minister Aiyaz Sayed-Khaiyum.
Mr Sayed-Khaiyum said the loan from the Fiji National Provident Fund (FNPF) was for a 12-year repayment period.
“To date, Fiji Airways has already paid $92 million of that $146 million — it’s way ahead of its payments,” he said.
“And FNPF has earned quite handsomely from that particular loan that they gave. They’ve already earned $34 million alone in interests and it has been a good financial arrangement for them.
“The loan was the normal 20 per cent down payment needed to be paid by Fiji Airways before the other finances were catered for by banks.
“Now in the case of the A330s, the decision was made to purchase the A330s and of course we had to have it financed. And as I highlighted, normally you get the finance done by banks, but the normal 20 per cent down-payment needs to come from the airline company themselves.
“The balance of the 80 per cent loan financing to pay the balance of the net fly away purchase price was provided by a consortium of German banks with the support of the European Export Credit Agency by way of guarantee.
“This support from the ECA is very, very important. Without it, the interest rate payable by Fiji Airways would be much higher or obviously significantly impact our ability to purchase in the first place, but also the cash flow.
“The ECA’s of course only provide the financing guarantee support for the loan and in addition to the credit assessment and approval of the airline.
“The security arrangements are done through a wholly dependent special purpose company to be set up to hold the title of the aircraft while the loan is being repaid.”
