AF201

ASSIGNMENT 1

NAME: Navinesh Nand

STUDENT ID: S11157211

SIGNATURE:

i
 TITLE:
CHALLENGES, GROWTH
OPPORTUNITIES AND PRACTICES
ADOPTED BY FIJI AIRWAYS

ii
 EXECUTIVE SUMMARY
Gathering the information about Fiji Airways was a huge task. Finding about its challenges,
growth opportunities and response to systems and practices was crucial. The findings made
were of great interest. The top of it was how the Airways was able to make down payment of
their loan well before due which was taken from FNFP. This was made possible due to
constant profits being made by the entity. The organisation also made significant changes to
its IT system. This upgrade bought about new technologies and systems which could serve its
customers more efficiently and reliably. The research has further explored some other
relevant findings which will be discussed more in the report.

iii
 TABLE OF CONTENT

1.0- INTRODUCTION................................................................................................................................ 1
2.0- CHALLENGES .................................................................................................................................... 2
2.1-FINDING PILOT .............................................................................................................................. 2
2.2-HOTEL PRICES ............................................................................................................................... 2
2.3-DIVERSIFYING PRODUCTS ............................................................................................................. 2
3.0-GROWTH OPPORTUNITIES................................................................................................................ 3
3.1-CODESHARE AGREEMENT............................................................................................................. 3
3.2-MOBILE APPLICATION ................................................................................................................... 3
3.3-UPGRADING IT INFRASTRUCTURE ................................................................................................ 3
4.0-RESPONSE TO PRACTICES AND STRUCTURES ................................................................................... 4
4.1-DISCLOSURE OF PERSONAL INFORMATION.................................................................................. 4
4.2-LOAN REPAYMENT ........................................................................................................................ 4
4.3-FIJI AIRWAYS AGREEMENT WITH USP .......................................................................................... 4
4.4-DONATIONS FOR DISASTER RELIEF ............................................................................................... 4
5.0-ASSISTANCE OF MANAGEMENT ACCOUNTING IN DECISION MAKING ............................................ 5
6.0-CONCLUSION .................................................................................................................................... 5
7.0-BIBLIOGRAPHY .................................................................................................................................. 6

iv
 1.0- INTRODUCTION

Fiji Airways is Fiji's first historically speaking worldwide carrier going more than 10 nations.
Fiji Airways has defeated numerous hindrances since its introduction to the world in 1951.
Over the previous decades the carrier has demonstrated what it is equipped for as far as
giving aircrafts administrations to its best ability to all household and global clients is
concerned.

Most of the information’s were covered from online materials. For example, Fiji Airways
website and Fiji Sun. Due to Airways popularity, sufficient information was available online
but some were hard to locate. Reaching to the management of the company was a difficult
task. Getting some information such as number of pilot in the Airline industry and exact
wages were hard to trace as these information’s were not available online and the reply of the
email about this question was never sent.

Management Accounting is a very wide field of studying. It heavily involves providing

assistance to internal management for better communication of information. This report will
focus on challenges faced by Fiji Airways during its operational times. It will also discuss
how the Airways has made innovations which have created more opportunities for growth.
The Airline has sound theory for its practices and structures which are addressed in a very
professional manner and further discussed in this report.

1
 2.0- CHALLENGES

2.1-FINDING PILOT
Just like any other organisation, Fiji airways also have to fight through tough times to reach
to a height on which they are today. Since Airways was a local company, it had difficulties in
finding local pilots. The current Chief Pilot for the Airways is Captain Aaron Dean. Hunting
down them was a gigantic errand as not very many were keen on taking up pilot occupations
in Fiji. Because of this the aircraft was compelled to procure more expatriates at a greater
expense.

2.2-HOTEL PRICES
Airways is always in search of other flying destinations to expand its operations. In order for
customers to go to desired destinations, the accommodation prices play a huge role. The
routes that Fiji Airways covers are subject to change during customer preferences for hotel
prices. The hotels tend to increase their rates during peak seasons which usually affect the
number of customers travelling to a particular country. For example, the current rate for
Sofitel Fiji Resort & Spa for a week’s stay is $1554 (Booking.com, 2019). The destinations
that would attract huge customers during normal days would attract less during peak seasons
resulting in decreased flight services for Fiji Airways.

2.3-DIVERSIFYING PRODUCTS
Tourists are attracted in countries for many reasons. One of them is the range of products that
a country has to offer to its customers. Foreigners have desires to collect rare bits and pieces
from any countries they visit as memories of their trip. Diversifying through different
products are targets for tourist attraction and indirectly boosting airlines services as a result of
these diversified products. Another diversification by tourism Fiji to boost airline services is
the introduction of Super Rugby game between Crusaders and Highlanders and also Fiji
International Golf tournaments. As it is an international game, many spectators would travel
around the globe to take advantage of this offer, meaning an increase in flight services. Some
other products in tourism market may involve quality hotels, great customer care services and
improved infrastructures.

2
 3.0-GROWTH OPPORTUNITIES

3.1-CODESHARE AGREEMENT
Fiji airways have recently signed an agreement with Hong Kong Airlines which will offer
smooth transition for customers to travel to six destinations around South Pacific and Asia.
Under this agreement, Hong Kong Airlines’ “HX” code will be placed on Fiji Airways’
flights between Hong Kong and Nadi (Fiji), as well as Nadi and Auckland. At the same time,
Fiji Airways will put its “FJ” code on Hong Kong Airlines’ flights between Hong Kong and
Bangkok, Tokyo and Osaka (Fiji Airways, 2018). The Fijian Airline will offer Asian
customers with Asian menus and will also house interpreters on flights between Hong Kong
and Nadi for ease of communication.

3.2-MOBILE APPLICATION
Fiji Airways has signed an agreement with a telecommunication company known as
Travelport which will provide the airline with a mobile app which will allow for better
customer interaction with the airline. This app will be a robust tool which will provide
customers with greater experience during travelling. With this new agreement, Fiji Airways
will be able to gauge the trends of its online booking and other online behaviour. Analysing
these trends will enable the airline to effectively monitor its sales and marketing trends. This
app was launched in the second quarter of 2018 (Travelport, 2017).

3.3-UPGRADING IT INFRASTRUCTURE
The airline has acquired $400,000 worth of hardware equipment’s from Datec Fiji Limited in
order to improve on its infrastructure (Lal, 2014). This new addition of hardware will
improve the information technology services. This hardware will assist in routing all the
airline links of foreign ports to its main server in Nadi. This upgrade will also involve Fiji
Airways choosing WAN (Wide Area Network) as there network type for wide range of
communication purposes. Since Airways services is spread across countries, WAN will allow
them to cover greater distances as it uses technologies such as fiber optic cables, satellite
radio links and microwave radio links. This upgrade took place at the end of June in 2014.

3
 4.0-RESPONSE TO PRACTICES AND STRUCTURES

4.1-DISCLOSURE OF PERSONAL INFORMATION

The personal information which is submitted to the Airways is controlled by Air Pacific
Limited trading as Fiji Airways. They are following a privacy policy system known as
"European Data Protection Legislation" (Fiji Airways, 2019). They have open choices for
the customers that whether they want to disclose their personal information with the authority
or not. But in case they do not disclose than Airline may not be able to respond to their
queries or provide any other requested services.

4.2-LOAN REPAYMENT
In 2015, Fiji Airways made an early down payment for a loan which it took from Fiji
National Provident Fund (FNPF) to aid in the purchasing of three A330 Aircrafts. They made
a lump sum payment of $20m to the superannuation fund. This was made possible as the
carrier was able to make record profit in the previous year (2014) of $60.8m, thus being
ahead of the payment schedule.

4.3-FIJI AIRWAYS AGREEMENT WITH USP

Fiji Airways and University of the South Pacific (Faculty of Science, Technology &
Environment) has formalised an agreement for students majoring in Bachelor of Engineering
programs to take attachments at the Airlines main Hanger facility in Nadi. This will provide
the students with real world working experience under the National Carrier. Having industrial
work experience is also a requirement for students majoring in Engineering to take up this
attachment. The students will be required to attain 800 hours of industrial work experience.
This partnership has also boosted the Airlines Engineering department as they will be able to
gauge the students’ performance in order to further track them down in the future. This
Memorandum of Understanding was signed on 7th February 2018.

4.4-DONATIONS FOR DISASTER RELIEF

On 25th February 2016, the Fijian Airways donated $1m to the Prime Ministers disaster relief
fund. This was done after the hit of tropical cyclone Winston. The Airline was on standby to
help both in cash and kind in terms of supplying any disaster relief materials to the affected
areas at free of charge. The Airline was severely affected aftermath cyclone Winston as its
passenger numbers declined. The government also made a statement to support the airline to
get the tourism industry back to its feet as soon as the effects of the disaster ease.

4
 5.0-ASSISTANCE OF MANAGEMENT ACCOUNTING IN DECISION
MAKING

Management accounting is a field of studying which provides much strategy-making and

forecasting assistance to the internal parties of Fiji Airways management. It helps the internal
administrators of an organisation to work as organizers such as planning the arrival and
departure of Fiji Airways aircrafts. Management Accountants are part of nearly every task
that is carried out in any department of an organisation. These professionals could be the
supervisors in the airline or even maybe creating policies for better growth of the
organisation.

Making future strategic plans and forecasting is an essential quality of management

accountant. For example, Fiji Airways will be interested in a strategic plan that would secure
more flying destinations in the coming years or even adding more fleets under its name. The
information’s which are analysed by these accountants are very sensitive. It could be a matter
of huge profit or loss. As for instance, if the Airways have enough fleets but a management
accountant analyses that they are losing customers due to lake of airplanes, than it would
result in buying of more planes which would incur huge losses. To minimise all these
exposures, the management accountant carefully chooses its alternatives to keep the
organisation running in the foreseen future.

6.0-CONCLUSION

To sum up the report, the role of management accountant plays a very crucial part in
upbringing an organisation to newer heights. Its ways of critical thinking and strategic
planning sets pace for organisations to follow in order to meet their needs. Like any other
organisation, the challenges, opportunities and innovations and planning on how to carry out
organisational practices are vital component in management accounting.

Fiji Airways has very sound and realistic strategic plan which has proved to be successful so
far due to number of achievements it has made. The involvement in mobile apps, signing new
codeshare agreements, making donations and keeping up to date with loan repayments are
just the glimpse of it. Airways has maintained its standard in the world through practices and
procedures it has adopted. Through strong management system and proper planning has
enabled Fiji Airways to carry out its operations efficiently and smoothly.

5
 7.0-BIBLIOGRAPHY

Booking.com, 2019. Hotels In Denarau. [Online]

Available at: https://www.booking.com/searchresults.en-gb.html?aid=356980&label=gog235jc-
1DCAsoSUITZmlqaS1yZXNvcnQtYW5kLXNwYUgJWANoSYgBAZgBCbgBCMgBDNgBA-
gBAfgBAogCAagCAw&lang=en-
gb&sid=105d63eb7999f1bf5b6298ae186408f1&sb=1&src=searchresults&src_elem=sb&error_url=ht
tps%
[Accessed 25 February 2019].

Fiji Airways, 2018. Hong Kong Airlines Signs Codeshare Agreement With Fiji Airways. [Online]
Available at: https://www.fijiairways.com/en-in/about-fiji-airways/2017-media-centre/fiji-airways-
hong-kong-airlines-sign-codeshare-agreement/
[Accessed 24 February 2019].

Fiji Airways, 2019. Privacy Policy. [Online]

Available at: https://www.fijiairways.com/en-in/privacy-policy/
[Accessed 26 February 2019].

Lal, R., 2014. Fiji Airways Upgrades IT Infrastructure Continues Supporting Fijian Companies By
Acquiring Hardware Equipment From Locally Supplier Datec. [Online]
Available at: https://fijisun.com.fj/2014/05/17/fiji-airways-upgrades-it-infrastructure-continues-
supporting-fijian-companies-by-acquiring-hardware-equipment-from-locally-supplier-datec/
[Accessed 26 February 2019].

Travelport, 2017. Fiji Airways Drives Mobile Strategy With Travelport Fusion. [Online]
Available at: https://www.travelport.com/company/media-center/press-releases/2017-12-06/fiji-
airways-drives-mobile-strategy-travelport-fusion
[Accessed 25 February 2019].