Amid broader turbulence in the aviation sector, Asian public sector institutions rolled out hundreds of millions of dollars’ worth of support to airlines in the region last week.

In one deal, the Japan Bank for International Cooperation (JBIC) inked a ¥25.3bn (approximately US$232mn) guarantee agreement covering four private financial institutions for the principal and interest of their loans to Japan Airlines (JAL).

In doing so, the Japanese export credit agency (ECA) is helping JAL obtain financing from Mizuho, MUFG, SMBC and Chiba Bank for the import of two aircraft from Airbus in France.

“It will contribute to maintaining and improving the international competitiveness of the Japanese aviation industry,” JBIC says in a statement.

Travel restrictions have severely hampered global airlines’ business revenues in the past year. In Japan, JAL and the nation’s other major operator – ANA Holdings – are both expected to record sizeable losses.

ANA Holdings projects it will be hit by a group net loss of ¥510bn (US$4.7bn) for the full year through to March, while JAL forecasts in a recent financial statement that it will suffer an annual net loss of ¥420bn (US$3.9bn).

JBIC has extended more than a dozen guarantees for the import of aircraft by JAL and ANA since 2015.

Elsewhere in the Asian Pacific aviation space, the Asian Development Bank (ADB) and Fiji Air Pacific inked a US$65mn liquidity support facility last week.

The financing is comprised of a US$40mn loan from ADB and a further US$25mn facility from the Leading Asia’s Private Infrastructure Fund, with the development bank administering the deal.

Proceeds from the deal are expected to fund Fiji Air Pacific through the current downturn in international travel and support its return to profitable operation.

“Covid-19 has crippled the international aviation industry,” says Jackie Surtani, director of ADB’s infrastructure finance division, covering East Asia, Southeast Asia and the Pacific.

“This has severely affected Fiji and other Pacific countries which rely on air links for critical freight, health, education, communication services, and especially for tourism – which accounts for around one-third of Fiji’s gross domestic product,” he adds.

Fiji Airways CEO Andre Viljoen adds that the ADB facility will help the company “weather the turbulence of Covid-19 and sustain our critical role in connecting the world to the Fijian and regional economies”.

In February, the World Bank agreed to provide US$50mn in credit to the South Pacific nation, which has seen its economy devastated by Covid-19 and a series of tropical cyclones in the past 12 months.

“The immense social and economic impacts of Covid-19, which have brought Fiji’s tourism sector to a virtual standstill, have been exacerbated by a staggering five tropical cyclones in the past 12 months; including two severe Category Five cyclones,” the World Bank says.

It adds: “These external shocks have resulted in an economic contraction of 19% in 2020 and a rise in unemployment to 27% – the most severe contraction in Fiji’s history.”