Fiji Airways to expand in Los Angeles and Sydney and its new A350s will provide additional premium seating

Fiji Airways plans to add premium capacity to Los Angeles and Sydney after it takes delivery of two Airbus A350-900s in late 2019. Capacity on its three long haul routes to East Asia – Hong Kong, Tokyo and Singapore – is also expected to increase as some flights are up-gauged from A330-200s to A330-300s.

The airline announced in May-2019 the lease of two A350-900s from DAE Capital. Fiji Airways CEO Andre Viljoen told CAPA on the sidelines of the Jun-2019 IATA AGM the aircraft will be used on daily services to Sydney and Los Angeles. The airline currently operates two daily flights from Nadi to Sydney using a mix of 737-700s, 737-800s, A330-200s and A330-300s. Los Angeles is served once daily with a mix of A330-200s and A330-300s.

Los Angeles has been served with A330s since 2013, when Fiji Airways replaced 747-400s with smaller A330-200s. Fiji Airways took delivery of a larger A330-300 in 2015 and mainly has used this aircraft for Los Angeles although it is also currently deployed on some Hong Kong and Sydney flights.

Mr Viljoen said the use of A330s on Los Angeles is not ideal as it has limited cargo capacity. The A330 also has proven recently to be too small for Los Angeles given the increase in passenger demand, including premium demand.

Fiji Airways’ new fleet of A350-900s will have 301 economy and 33 business class seats compared to 289 economy and 24 business class seats on the A330-300s. It has three A330-200s with 249 economy seats and 24 business class seats and two A330-200s with 236 economy seats and 18 business class seats.

The A330-200s with 24 business class seats are generally used on its long haul routes (North America and Asia) while the A330-200s with 18 business class seats are used on medium haul routes to Australia and New Zealand. All its widebody business class seats are lie-flat.

CHART – Fiji Airways has grown its operations significantly since 2014 with year-on-year system capacity rises of between +8.2% and+16.9%, but that network expansion has stalled in 2019Source: CAPA – Centre for Aviation and OAG

With the A350-900 Fiji Airways can better meet passenger and cargo demand to Los Angeles while further improving its inflight product. Mr Viljoen said the A330-300 now used for Los Angeles will be redeployed to Hong Kong, Tokyo and Singapore, which are now mainly operated with smaller A330-200s.

For a few years Fiji Airways had been evaluating A350s as well as A330neos and 787s. A selection of new generation widebody aircraft was initially expected in 2018 but delayed as the airline instead decided to sublease two ex-Air Seychelles A330-200s (the aircraft with only 18 business class seats).

The decision earlier this year to lease two A350s came somewhat of a surprise and can been viewed as an opportunistic move with an attractive lease deal on two white tails that were originally intended for another customer.

The first A350-900 is slated to be delivered in Nov-2019 followed by the second aircraft in Dec-2019. Fiji Airways could potentially acquire more A350s. It is now considering two more widebody aircraft for delivery in 2021 but is not only looking at A350s and is still weighing its long-term widebody options.

What initially seemed like a straightforward decision on widebody fleet renewal was made complicated as Fiji Airways realised it could not phase out its initial three A330-200s without taking a USD150 million write down. These three aircraft are owned while the two A330-200s added in 2018 and its lone A330-300 are leased.

Fiji Airways would prefer to sell its three A330-200s but cannot afford to take a big loss. It now intends to continue operating the aircraft until 2026, when loans expire, unless it is able to find a solution earlier. The two A330-200s added last year are on short term wet leases that will expire in 2022. The lease on the A330-300 expires in 2021.

With the two A350-900s, Fiji Airways will have increased its widebody fleet from four to eight aircraft in a span of only 18 months. While this seems ambitious it meets an objective that was initially set a few years ago in a new business plan that supports a new tourism plan that was developed by the government in 2017. Fiji is aiming to grow its tourism industry from USD1.6 billion in 2016 to USD2.2 billion by 2021. To meet this objective the government is investing significantly in tourism infrastructure, including airports, as well as its flag carrier.