The new aeronautical fees charged to international airlines for use of the airport facilities in Fiji has come into effect from 1 February 2015.
The Attorney-General, Hon. Aiyaz Sayed-Khaiyum, said that 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 per cent all other charges increased by 70 per cent. The new rates set the maximum AFL can charge – at its discretion – but no more.
“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,” said the Attorney-General.
The Attorney-General said that 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. Furthermore, AFL over the past year has given significant pay rises to its specialised aeronautical staff in order to mitigate the risk of touting from competitors and in order to improve staff morale and service levels,” Mr. Sayed-Khaiyum said.
The Attorney-General said that whilst comparing our aeronautical fees and charges with similar ports in the region is not the main determinant, it is notable to observe that prior to the increase in aeronautical charges, Fiji was significantly cheaper than international airports in Australia, Pacific Island Countries and New Zealand.
He said that even after this increase AFL’s aeronautical charges remain the cheapest when compared to most Pacific Island, Australian and New Zealand international airports.
The Attorney-General emphasised that the domestic charges have not increased so there will not be any impact on domestic fares. “Whilst international aeronautical charges have increased it is difficult to say whether this will impact international fares. There are myriad factors that determine the international fares into and out of Fiji and aeronautical charges are just one factor. The many factors that make up the price quite often move in opposite directions at different points in time,” he said.
“Government has made the modernisation of Fiji’s airports one of our top priorities and 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; the development of an airport hotel site in Nadi; and much more,” he said.
”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 in order to ensure that returns to Government are reasonable when compared to its investment,” he added.
“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,” he said.