FIJI Airways would have recorded an estimated $42 million profit in 2024 if not for $84m in unrealised foreign exchange losses, which wiped out its operating gains and pushed the national carrier into a $25m after-tax loss.
Fiji Airways board chairperson Nalin Patel revealed this while presenting the airline’s 2024 annual report to the Standing Committee on Social Affairs, explaining how currency fluctuations affected the airline despite record revenue of $1.847 billion.
“Because of that significant item which is unrealised foreign exchange losses, Fiji Airways ended up with a loss after income tax of $25m,” Mr Patel said.
He said foreign exchange losses did not involve an immediate cash outflow but significantly impacted the airline’s reported financial results.
“So in this case, while there’s no cash going on, it does have an impact on our results, and that’s an ongoing thing.”
Mr Patel said the airline’s major liabilities, including lease liabilities, were denominated in US dollars, exposing its financial position to movements in the exchange rate.
Under accounting standards, those liabilities must be converted into Fijian dollars at the end of the reporting period. When the Fijian dollar depreciates, their value rises in local currency terms, resulting in unrealised foreign exchange losses, he said.
Despite the setback, Fiji Airways recorded total revenue of $1.847bn for the year ended December 31, 2024, which Mr Patel described as a record turnover at the time.
Passenger revenue accounted for about $1.7bn, while cargo revenue increased from $99m to $112m. Other revenue totalled about $26m.
However, Mr Patel said the airline’s operating costs remained substantial, with fuel expenditure alone reaching $495.445m.
“In terms of the fuel costs, Fiji Airways – for the year ended 2024 – paid almost $500m.
“That just shows that’s probably one of the biggest cost items that we are grappling with at the moment.”
After operating expenditure of about $1.5bn, including fuel, the airline recorded earnings before interest, taxes, depreciation, amortisation and rent of approximately $325m.
Its operating profit before finance costs and taxation was about $95m, falling to $23.6m after finance costs and before other significant items.
Mr Patel said the airline faced an ongoing challenge because most of its costs were also denominated in US dollars, creating exposure to foreign currency movements.
He said the airline had approval for foreign currency accounts totalling about $200m across various denominations, with the arrangements monitored by the Reserve Bank of Fiji.
“We are required to give them monthly acquittals and all that.”
Fiji Airways board chairperson Nalin Patel submits the company’s report to the Standing Committee on Social Affairs. Picture: FIJI PARLIAMENT
Fiji Airways board chairperson Nalin Patel submits the company’s report to the Standing Committee on Social Affairs. Picture: FIJI PARLIAMENT
