State-owned carrier Air Vanuatu declares bankruptcy after cancelling overseas routes
Air Vanuatu, the national airline of Vanuatu, has filed for voluntary administration – a form of bankruptcy protection equivalent to Chapter 11 in the US – just one day after cancelling all of its international flights with immediate effect. The cancellation caused widespread disruption, stranding thousands of travellers in Australia and New Zealand.
The airline was forced to ground over 20 flights between Vanuatu's capital Port Vila and the Australian cities of Sydney, Brisbane as well as Auckland in New Zealand for the remainder of the week. Air Vanuatu cited “extended maintenance requirements” on their aircraft as the reason for the cancellations.
Australian restructuring specialists Ernst & Young have been appointed as administrators to assess options for keeping the airline operational. Administrator Morgan Kelly stated that continued safety of operations will be the top priority. Management will remain in place to ensure minimal disruption to customers during this transition period.
Kelly noted Air Vanuatu plays a vital role for Vanuatu's economy and connectivity, with tourism being a major income driver. All options will be evaluated to resume flights as soon as feasible, whether through new partnerships, ownership changes or refinancing.
The cancellation has left many tourists stranded, including Australian Sally Witchalls whose travel insurance does not cover airline administration. Officials are working closely with carriers like Virgin Australia and Fiji Airways on rebooking impacted flyers.
With a fleet of just four planes serving key routes, Air Vanuatu has struggled with issues like staff shortages, high costs and reduced visitor numbers due to weather events in recent times. The administrators will explore all avenues to achieve long term financial sustainability for this crucial domestic operator.
