AIR VANUATU: Cancels flights, enters voluntary administration

Late yesterday afternoon (Thursday, 10 May), the Vanuatu government, which owns the airline, announced that it would cease all flights for the next three days while the Government determined the company’s fate.

Passengers were stranded without a clear idea of what to do—whether to rebook flights on other airlines or wait until the government declared the airline’s fate.

Voluntary administration

We now know the Air Vanuatu’s fate, sort of. It has entered voluntary administration, with all lights cancelled until Sunday, 12 May, which covers international flights between Port Villa, Vanuatu and Australia and New Zealand.

But that is not necessarily the end of the airline. Administrators Ernst & Young Australia have said that they will let the airline

“…resume normal trading as soon as possible, while considering all opportunities to place the carrier on a stronger footing.

“The outlook for the airline is positive, despite pressures on the broader industry, and we will be focused on securing the future of this strategically vital national carrier,”

“Air Vanuatu is critical to the people of the Republic of Vanuatu and a strategically important business to the nation. Our team is working closely with management to ensure continuity of service to customers and to ensure services continue as seamlessly as possible.”

Morgan Kelly, EY’s liquidation team

Advice for travellers with cancelled flights

There is updated advice for travellers who are directly affected by the cancellation of virtually all international flights. Visit the ts Smartraveller website which currently advises that you ‘contact the airline, your travel agent or insurance company about rescheduling flights.’

“We are conscious of the impact this situation has on travellers, ticket holders and the industry and on behalf of the Vanuatu tourism industry extend our apologies to anyone affected.”

Vanuatu Tourism Office statement

Check the Air Vanuatu Travel Advisory page for updated information on flights. You can also check the Vanuatu Tourism updates page, although neither has particularly helpful information at the moment.

Some background

As well as the normal pressures facing the airline industry, such as staff shortages, maintenance issues and inflation, Air Vanuatu has been affected by the disruption to the tourism industry caused by cyclones.

The Australian Government reviewed the airline at the invitation of the Vanuatu government last year. It provided advice, including to grow its fleet of planes to meet the demand for international and domestic services

2PAXfly Takeout

Air Vanuatu and airline facilities in the island nation are constantly precarious. In 2016, carriers Air New Zealand, Qantas and Virgin Australia pulled flights from Port Villa’s Bauerfield Airport. There were concerns about the safety of the runway. At the time, the runway was five years overdue for resurfacing, but the island nation was hard-pressed to meet the costs. Incidentally, the year before, 14 politicians had been convicted for bribery.

This island nation would barely survive without its airline connections. A solution will need to be found, which might involve privatising the airline or adding expertise to its running. Given the flux of loyalties and foreign influence in the Pacific, Australia or the USA may have a role in stabilising the airline through investment or expertise.

Port Villa is currently served by the following airlines: Virgin Australia, Aircalin and Fiji Airways.