Aviation, tourism and energy writer for the Business Herald

Steep tax rise not worrying travellers, says Fiji Airways

Fiji Airways last year changed its name from Air Pacific.
Fiji Airways last year changed its name from Air Pacific.

Fiji Airways says the steep rise in departure tax from its home base is not putting off travellers as the airline embarks on an ambitious five-year plan to increase revenue.

Departure tax went up from just on $96 to $128 on January 1, making it one of the highest in the world and disappointing some in the industry.

Fiji Airways chief executive Stefan Pichler said the airline had at first been worried about the new fees.

"We were scared that might have influenced demand but it hasn't - there was zero impact on demand."

Pichler said the extra charge would add about 2.5 per cent to average package tour prices.

The extra income was tagged for infrastructure development, environmental projects and education.

Flight Centre's general manager of product, Simon Mckearney, says customers will not have noticed the charges as they are included in the price of package tours but it could be a deterrent for the budget-conscious.

"Fiji is always going to be a popular destination and the consumer doesn't see it when it's built into ticket cost.

"Would it drive the consumer away? Probably not but as it gets up there the other islands like the Cooks which are really competitive at the moment [will] start to [promote] their pricing," Mckearney said.

Fiji Airways last year changed its name from Air Pacific, the culmination of three years of change as it swapped its fuel-hungry Boeing 747s for more efficient Airbus A330s.

Pichler said during the next five years the airline would concentrate on improving profit, aiming to grow from the current break-even position to profits of F$68 million ($43.6 million) by 2017.

The airline also wanted to add a new aircraft to its fleet every year, which would increase capacity 35 per cent from 1.3 million seats, and boost passenger numbers by 39 per cent over the next five years.

The airline aims to increase capacity in New Zealand by 59 per cent from 237,000 seats a year at present.

Pichler said Fiji Airways would not get drawn into aggressive discounting to fill seats. "With a better product you're always trying to get more money out of it. It's driven by the market, we're not dumping capacity, we're not discounting our product.

"We want to be in a win-win situation with everybody - we want to have a sustainable price."

Fiji Airways has altered its schedule to allow same-day connections from Auckland to Los Angeles.

While Air New Zealand remains the only airline flying directly across the Pacific, Fiji is the only other carrier flying the route daily.

Pichler said his airline was deepening ties with Qantas, which included enhancing interline agreements and lounge access.

Fiji Airways was nearing the end of a big management shakeup in which external consultants had been replaced by senior airline managers.

"You choose the right people to fit the boxes, it's a very clinical process."

Pichler had appointed Carolyne Gregory, formerly director of inflight services at Aer Lingus, to take charge of product and service and was also about to appoint a yet-to-be-named Australian as executive marketing and sales director.

The airline was also eyeing fuel and currency hedging policies.

"When you run an airline you have factors you cannot manage, fuel, currencies and the interest charged on loans. Right now the fuel price is okay, it's below our budget levels."

Fiji Airways

Largest business in Fiji and aims to build staff numbers from just over 1000 to 1300 in the next five years

The fleet

3 Twin Otters
4 737s
3 A330s

- NZ Herald

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