Exclusive: Fiji Airways has no expansion plans for Australia, leaving little hope for an expanded Australia-Fiji bilateral

2 March, 2018

Fiji Airways is not interested in seeking additional traffic rights for Brisbane, Melbourne or Sydney, which could thwart Australia's attempt to forge an expanded air services agreement with Fiji.


  • Fiji Airways is now fully using its capacity entitlement to Australia during peak periods;
  • Capacity entitlements for Australian carriers will be fully used later this year following planned expansion from Jetstar and Virgin Australia;
  • Australia is keen to forge an expanded air services agreement with Fiji but Fiji is not likely to agree unless Fiji Airways is interested in more traffic rights;
  • Fiji Airways says it is satisfied with the current entitlement, which caps the number of seats from the four main Australian gateways.

Fiji Airways is planning significant capacity expansion over the next year as it adds a fifth A330 and introduces higher density narrowbody aircraft with the delivery of five 737 MAX 8s. However, the focus will be on expanding in other markets while capacity to Australia, its largest single market, remains relatively flat.

The Australia-Fiji air services agreement is now capped at 6,500 weekly one-way seats for each side. All 6,500 seats for the Fiji side are now allocated to Fiji Airways, which used all of its seats during peak periods earlier this summer. Fiji Airways is operating 26 to 37 weekly flights to Australia this summer, depending on the week, while Virgin Australia is operating 15 to 22 frequencies and Jetstar is operating three to four frequencies, according to OAG data.

There are currently 501 unallocated seats for Australian airlines but IASC on 22-Feb-2018 awarded 242 of these seats to Virgin Australia. Jetstar Airways applied on 13-Feb-2018 for 250 of the remaining seats. Virgin Australia intends to use the additional seats by the end of Jul-2018, while Jetstar parent Qantas stated it would use the additional seats by the end of Dec-2018.

Australia has been keen for some time to extend its bilateral with Fiji. IASC awarding the last available seats to Jetstar and Virgin Australia - which means airlines from both sides will be using all available seats during peak periods next summer - adds urgency to Australia's push for an expanded bilateral with Fiji.

However, Fiji is not likely to agree to more traffic rights unless Fiji Airways is keen for more. Fiji Airways chief commercial officer Marc Cavaliere told CAPA on 27-Feb-2018 that the airline is not looking for more traffic rights to Australia. He said the airline is approaching full use of its seat entitlement during peak periods but it does not have a need to further expand during these periods.

Fiji Airways is still able to add capacity during most of the year while remaining under the 6,500 seats cap. Fiji Airways is also able to add services to Adelaide or launch new secondary destinations as the cap only applies to Brisbane, Melbourne, Perth and Sydney.

Fiji Airways is not interested in serving Perth and is not currently looking at adding capacity to Adelaide, which was launched at the end of Jun-2017. Mr Cavaliere said "Adelaide is doing nicely" and that South Australians are now becoming more familiar with Fiji as a destination and with using Fiji as a stopover to trips to the US. However, demand has not reached a point where additional flights can be supported.

Fiji Airways' passenger traffic to Australia has been flat the last four years at slightly over 450,000 passengers per annum. Fiji Airways carried 466,000 passengers to and from Australia in FY2017 and 463,000 passengers in FY2016, according to BITRE data. Its load factor was 81% in FY2016 and 82% in 2017.

However, Fiji Airways traffic growth accelerated significantly in 2HCY2017. In the July through November period, Fiji Airways' Australia traffic increased by 16% to nearly 230,000 passengers. (BITRE has not yet released international traffic data for Dec-2017.)

The increase was partially driven by the launch of services to Adelaide but Fiji Airways has also been growing at its three longstanding Australia destinations - Brisbane, Melbourne and Sydney. Adelaide, which was launched on 30-Jun-2017, accounted for only 8,000 passengers in the July to November period, while the other three markets generated 23,000 additional passengers.

Fiji Airways is replacing all of its 737-800s with 737 MAX 8s in late 2018 and early 2019, which will result in a 13% increase in capacity on all flights now operated with 737-800s. Fiji Airways may have to slightly reduce frequencies to Australia during peak periods once the 737 MAX enters service in order to stay under the 6,500-seat cap. However, it appears this is preferred over seeking more traffic rights - which would require an expanded air services agreement and result in more competition from Australian airlines.

Australian visitor numbers to Fiji have been relatively flat since 2011 and is unlikely to grow without a new bilateral - which would particularly open up opportunities for LCCs to expand and stimulate demand. However, Australia is generally not a growing source market for Fiji's tourism industry, which is keen to diversify by relying more on other markets particularly in Asia. Fiji Airways is a key component of this diversification strategy and is focusing on Asia as it expands. Australia accounted for 43% of total visitor numbers to Fiji in 2017, down from 52% in 2013.

Australian visitor numbers to Fiji and year over year growth: 2011 to 2017

Source: CAPA - Centre for Aviation and Fiji Bureau of Statistics