Aiyaz Sayed-Khaiyum
The new aeronautical fees charged to international airlines for use of the airport facilities in Fiji has come into effect on February 1, 2015.
The increases will allow Airports Fiji Limited (AFL) to undertake a range of necessary reforms to improve its services and undertake significant infrastructure development.
The revised fees are for air navigation services, terminal navigation services, international landing charges, airport development, security charges, parking charges and incinerator charges.
Apart from incinerator charges that increased by 100% all other charges increased by 70%. The new rates set the maximum AFL can charge at its discretion, but no more.
Review suggestions
The increases are based on a review carried out by the Fiji Commerce Commission as part of the Commerce (Control of Prices for Aeronautical Services) Order.
Submissions were received from AFL, Fiji Airways, other international airlines, and related authorities.
The last time these aeronautical charges were reviewed and increased was in 2008 and the present review was long overdue.
The low aeronautical charges at Fijian airports hindered AFL’s ability to carry out much needed infrastructure development and provide reasonable returns to its shareholders.
Pay hikes
AFL has given significant pay rises to its specialised aeronautical staff over the past year to mitigate the risk of touting from competitors and in order to improve staff morale and service levels.
Whilst comparing our aeronautical fees and charges with similar ports in the region is not the main determinant, prior to the increase in aeronautical charges, Fiji was significantly cheaper than international airports in Australia, Pacific Island Countries and New Zealand.
Still cheapest
Even after this increase, AFL’s aeronautical charges remain the cheapest when compared to most Pacific Island, Australian and New Zealand international airports.
Domestic charges have not increased so there will not be any impact on domestic fares. While international aeronautical charges have increased, it is difficult to say whether this will affect international fares. There are myriad factors that determine the international fares into and out of Fiji and aeronautical charges are just one factor.
Other factors
The many factors that make up the price quite often move in opposite directions at different points in time.
The government has made modernisation of Fiji’s airports as one of its top priorities.
The new aeronautical charges will allow AFL to undertake a range of necessary capital investments, such as terminal and airfield upgrades at Nadi, Nausori and on the outer islands, modernisation of air navigation systems, developing new outer island aerodromes and development of an airport hotel site in Nadi.
The reforms carried out by the Bainimarama Government have drastically improved the performance of AFL and as a result, it returned a record-breaking $10 million dividend to Government in both 2012 and 2013.
AFL is expected to more than double the dividends to the Fijian Government in the subsequent years to ensure that returns to government are reasonable compared to its investment.
Better performance
With the new fee structure, we expect AFL’s performance to continue to improve with enhanced services to passengers and airlines alike. Fijian airports must develop to international standards and compete globally.
Aiyaz Sayed-Khaiyum is Attorney General of Fiji and a Minister handling several portfolios including Finance, Public Enterprises, Public Service and Communications. The above was a statement that he issued on April 2, 2015.
Photo : Nadi International Airport will be among the beneficiaries of higher aeronautical charges
