Fiji Airways is warning that a sharp rise in jet fuel prices linked to the Israeli‑US war on Iran is forcing the airline to weigh difficult decisions that could affect Fiji’s tourism‑dependent economy. The conflict, which began on February 28, 2024, has driven jet fuel costs to about double their pre‑conflict levels, putting immediate pressure on the carrier’s operating margins and prompting management to prepare contingency plans including potential route cutbacks.
Paul Scurrah, managing director and chief executive officer of Fiji Airways, told this newspaper last week that the airline is trying to manage a narrow path between protecting revenue and absorbing substantial increases in input costs. “The worst‑case scenario for any airline is another COVID,” Scurrah said, adding that a prolonged conflict could create both sustained cost increases and disruptions to fuel supply. “If it goes for much longer, a sustained increase in the cost will start putting pressure on airlines, particularly on marginal routes where they may not necessarily be making money.”
Scurrah said temporary network adjustments are an option but not the first choice. “We may do that. Certainly the other carriers are doing it. But we want to resist the temptation to do that just on a cost basis and do what we can to recover on the revenue side,” he said, noting the delicate pricing trade‑off: pushing fares up too far risks killing demand. For now, the airline aims to keep operating with its full fleet and maintain seat capacity to support hotels and tourism operators that depend on inbound travel.
The stakes for Fiji are significant. Tourism accounts for roughly 40 to 50 percent of the country’s GDP and, according to the Fiji Bureau of Statistics, directly employs more than 120,000 people. Fiji Airways is also a major domestic investor: the Fiji National Provident Fund holds a 30 percent stake in the carrier. Given that central role, Scurrah framed continued flight operations as not just an economic priority but a matter of national security, keeping supply chains and international links open for the islands.
Industry moves elsewhere are already visible, with some international carriers trimming networks in response to the fuel shock and logistical uncertainties. Fiji Airways’ public stance is to avoid reactive route cuts where possible, preferring to explore revenue measures first. However, Scurrah signaled the company would enact temporary network changes should the geopolitical situation and fuel supply pressure persist.
This update matters because an extended period of elevated jet fuel prices would squeeze margins across the aviation sector and could lead to reduced seat capacity into Fiji at a time when the tourism industry remains a linchpin of employment and government revenue. For now, Fiji Airways is warning of risk and preparing options while attempting to balance cost containment with the need to sustain tourist arrivals.
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