“Aside from Covid, which was a massive global impact on the airline industry, by and large the shocks that do occur in the industry occur in geographic regions.”
Some get hurt, others benefit. Currently, Europe and the Middle East are hurting, with some of their airlines cutting flights, getting grounded and Lufthansa even shutting down its CityLine regional subsidiary.
“On the passenger demand front and the revenue front we are luckily benefiting from it at the moment, but we’re also being impacted like every airline is at the moment on the cost side,” Scurrah says.
Blockades and brinkmanship on the Strait of Hormuz have sent jet fuel prices up. To compensate, airlines can nibble around the edges, consolidate a few routes here, add some surcharges there, but not to a point where airfares become onerously expensive or customers feel abandoned.
In New Zealand, the Government provides twice-weekly updates on petrol, diesel and jet fuel stocks, and the crisis has invigorated debate about energy security. Scurrah says Fiji has a similar situation.
He says six weeks of jet fuel supply with another six en route would be considered comfortable levels. New Zealand this week had less than four weeks of jet fuel in the country and just three weeks’ more en route.
“We are confident that we’ve got supplies for the foreseeable future. That gives us the comfort to continue selling our network as far and as wide as we can,” Scurrah says.
“We’ve chosen not to break it out as a surcharge. We have in certain circumstances pushed our base fares up.”
Scurrah says increased demand and higher load factors would have Fiji Airways raking in the cash but the airline wants to get the balance right.
He says it’s doing so by still offering affordable fares to New Zealanders wanting to go to Fiji or through Fiji.
“We try not to obsess about our competition other than to say our points of difference and our unique offering are something very hard to replicate, and that is the unique Fiji happiness you get when you step on board.
“Every airline in the world flies planes with similar seats to similar destinations, so the differentiating factor is the service you get on board, and the Fijian people are the happiest people in the world.
“We are the happiest airline in the world, and we think that really serves us well, and people can be absolutely certain they get a very consistent, very natural happiness.”
Fiji Airways often turns up at the top of the list if you’re searching for New Zealand-US flights and want the cheapest fares shown first.
“We’re getting an incremental passenger that would not have otherwise thought of us when the seat would otherwise have gone empty, so it’s a financial winner for us, as opposed to a loss.”
‘Co-opetition’
Scurrah says Fiji’s beauty and the airline’s fleet and crew enticed him to the job. It’s also relatively close to home for the Melburnian who has lived in Sydney and now Brisbane, so calls himself an East Coaster.
Fiji Airways is 50% government-owned. The Fiji National Provident Fund, the country’s super fund, has 30%. Then Qantas has 16% and Air New Zealand has 4%.
That makes for a somewhat unusual relationship with Air New Zealand.
But Scurrah might be well-placed to understand Air NZ’s new chief executive Nikhil Ravishankar, who started about the same time he did.
“There’s a word I learned many years ago called co-opetition. We both suffer some of the industry challenges at the moment, and common sense should prevail in that sense.
“But they are a very formidable competitor. Where we fly to the same destinations, they do an incredibly good job and, so in order to entice customers to choose us and not them, we’ve got to have a great offering.”
Scurrah says he recently met Ravishankar, who inherited a swarm of problems when taking over at Air New Zealand.
“I’m sure that he doesn’t want advice from me, and I’ve got my hands full running my own airline, but it’s a tough gig for Nikhil. I have a lot of empathy for him. He’s inherited a great airline, but there’s some structural problems that can’t be fixed quickly, and we’ve all got our version of that. There’s no perfect situation for an airline ever. There’s always headwinds and there’s always the potential for tailwinds.
Nikhil Ravishankar started as Air New Zealand chief executive around the same time Scurrah landed the job at Fiji Airways. Photo / Michael Craig
“I know how public running an airline is. I know how much free advice you get given as a CEO of an airline, so I’m offering my empathy, but I’m not going to give him any advice.
“There’s no real benefit in airlines forgetting that they operate in a volatile industry, and beating each other up mercilessly. Yes, compete hard, compete solidly against each other on the route you fly, but there’s a lot we can do together to make sure that the industry itself wins.”
But Fiji Airlines’ business model means it doesn’t have quite the same shareholder pressure as the hybrid 51% government-owned, 49% public-listed structure of Air New Zealand.
“We’re run obviously very independent from government because they’re a large shareholder but they’re not our only shareholder,” Scurrah says.
“In my time there’s been no pressure to change our ownership model. I mean these things can always change in time, but right now that’s not our focus.”
In New Zealand, carriers facing wildly high jet fuel prices have pushed for a more urgent response from the Government’s regional infrastructure fund, which dispenses low-interest loans. And New Zealand’s peak aviation sector group also says subsidies and not just loans must be considered.
Asking for your sector to get subsidies might be a sure fire way to incite other Kiwi industries into saying: What about me?
Scurrah says airlines could do a better job communicating what goes into regional flying, and what sort of essential services those domestic routes provide.
“You don’t have the sort of scale you have on widebodies. You still have two pilots at the front for a 19-seater, the same as you have on a 180-seater.
“So scale plays a factor, cost inputs play a factor but airlines necessarily need to recover the increase in those costs, and it’s the airline that normally cops the criticisms for it, and we need to do a better job of communicating what the inputs and the drivers are of the cost increases.
“There’s an element of domestic flying that is viewed more as an essential public transport service than it is a luxury, and we take that very seriously.
“We work with government on a lot of those routes which are subsidised and supported by the Fijian government, similar to a lot of other countries that do provide those subsidies.”
Scurrah says for his airline, government support was through helping Tourism Fiji promote the country as a safe, family-friendly choice for people.
Scurrah, now managing director and chief executive of Fiji Airways, was Virgin Australia chief executive when the Covid pandemic hit. Photo / Michael Craig
He says the airline is happy with its current fleet, which ranges from the 19-seat Twin Otter turboprop to the 334-seater Airbus A350 widebody.
With Airbus reporting a delivery backlog of at least 8000 aircraft and Boeing this week reporting a backlog of more than 6100, that might be a good place for Fiji Airways to be.
“We’ve got room to grow our network with the existing fleet, so it’s a constant review process we go through to make sure that we’re using the fleet as best as we possibly can.”
Rising tides
Nasa in 2024 estimated Tuvalu, Kiribati and Fiji would experience at least 15cm of sea level rise in 30 years, prompting far more high-tide flooding days in an average year by mid-century.
Aviation, reliant as it is mostly on fossil fuels, takes some of the blame for global emissions. The International Energy Agency said the sector in 2023 contributed just 2.5% of global energy-related CO2 emissions but its share in this century’s first two decades grew faster than rail, road or shipping.
Scurrah says the airline has several approaches to cutting emissions and doing better by the environment.
“And there’s a lot of support from the Fijian people to make sure we do that because there is no more obvious location in the world where climate change can have a negative impact. And the people of Fiji see it, and rely on us and companies like us to plan properly for it.”
One tactic to tackle emissions is to choose aircraft more fuel-efficient than their peers or predecessors. Another is having SkyBreathe cockpit technology, which helps pinpoint fuel-saving opportunities and fly the most fuel-efficient route.
He says the airline has trialled sustainable aviation fuel (Saf) on some flights to Singapore.
“The challenge with Saf is of infrastructure and scale, and there will be a point in time where that does tip in our favour and we see an acceleration of its availability and its affordability.”
In business class, the airline no longer gives everyone a standard amenities kit but offers component parts so that only what’s needed gets taken.
The Fiji Airways Boeing 737-800. Photo / Chris Sutton
Problems with waste food and plastic were raised at last year’s International Air Transport Association (Iata) World Sustainability Summit in Hong Kong.
Iata director general Willie Walsh, who in August takes over as chief executive of India’s biggest airline, IndiGo, said some food safety rules to blame for waste might be decades old, and the sector was trying to move away from plastics.
New Zealanders might be familiar with the One Billion Trees programme, and Scurrah says Fiji has its own version.
“For every take-off and landing we have, we plant a mangrove tree. And mangrove trees are four times more potent in terms of their carbon sequestering as a normal tree, so that’s a very powerful thing to do.”
He says the airline also uses renewable bamboo for its blankets, and is upgrading its ground fleet vehicles to hybrid or all-electric.
Double whammy
Scurrah says far more New Zealanders are travelling on his airline to Fiji and more are also going through Fiji.
“That two-fold whammy is seeing significant growth, and that gives us the confidence that we can actually do more and look at different ports or increasing frequency on other ports.”
The airline flies from Fiji’s biggest airport at Nadi to places including Tokyo, Singapore, Hong Kong, Vancouver, Los Angeles, Dallas Fort Worth and San Francisco.
The North American cities have been especially popular for Kiwis lately, Scurrah says.
The airline was also examining whether it should have year-round services between Fiji and Christchurch four times a week.
Scurrah, with more than 25 years’ experience in aviation and rail, seems bullish about Fiji Airways.
And when something closer to stability returns to the Middle East, and the hubs at Dubai and Doha get back to full strength, Fiji will need to consolidate whatever it gains it makes now.
“We know that there’s some people flying with us only because the normal offering is not there, but capturing and keeping a percentage of that is a big part of our focus.”
That means persuading today’s traveller of necessity to be tomorrow’s traveller of choice.
Fiji Airlines
Widebody fleet:
Airbus A350 XWN. 33 business, 301 economy seats.Airbis A330-300. 24 business, 289 economy seats.Airbus A330-200. 24 business, 249 economy seats.
Narrowbody jets:
Boeing 7367 Max 8. 8 business, 162 economy seats.Boeing 737-800. Also 8 business, 162 economy seats.
Turboprops:
ATR 72-600. 8 business, 60 economy seats.ATR 42-600. 46 economy seats.de Havilland Canada DHC-6 Twin Otter. 19 economy seats.
John Weekes is a business journalist covering aviation. He previously covered consumer affairs, crime, politics and courts.
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