Air Vanuatu: Ernst & Young appointed voluntary liquidators, Fiji Airways boosts capacity to Vanuatu

Photo: Air Vanuatu

Ernst & Young Australia have been appointed as Voluntary Liquidators of Air Vanuatu (Operations) Limited.

This follows the airline’s cancellation of around 20 flights to and from New Zealand, Australia and Nouméa last week after reportedly being placed into administration.

Whilst the shareholders have decided on liquidation, they clearly expressed to Ernst & Young their wish to see the continuation of operations of Air Vanuatu during liquidation, including the domestic, regional and international flights.

The airline in a statement said the current staff will remain in place and Ernst & Young will work closely with those staff through this exercise.

Government backs national airline

Vanuatu’s Government has also stated its full support of Air Vanuatu in addressing its current crisis.

Minister of Finance and Economic Management (MoFEM), John Salong, made this clear Sunday.

“We are making informed decisions. Air Vanuatu has faced longstanding issues,” he said.

“Firstly, it is important to remember that none of us want to lose Air Vanuatu. It is our national carrier, and we take pride in it as our flagship representing Vanuatu’s spirit as a tourist destination. Nobody wants to see Air Vanuatu fail.

“Everyone wants a better Air Vanuatu. We are all aware of problems with scheduling, flight cancellations, and issues with reliability and service that have led to complaints.

“The question is: what are we going to do about it? When the budget was passed in February, the government planned to allocate VT2 billion (US$16.63 million) towards new aircraft because we support Air Vanuatu.

“When we announced this budget, creditors such as ALC (Air Lease Corporation), the owners of the ATR, came forward and said, ‘You have not paid us. Air Vanuatu has not fulfilled its lease obligations for a long time. You have also not paid into the Maintenance Reserve Fund. Pay us immediately or we will repossess the planes.’

“All of this has been ongoing, and everyone knows that Air Vanuatu has been inconsistent in its service delivery. Some people criticise our decisions, but every airline worldwide has faced challenges after the 2020 (COVID) lockdown.

“Even Virgin Airlines, which operates here, went into bankruptcy protection in Australia to restructure and resume service.”

The Minister said many people do not understand the business aspect.

“When a business is insolvent, its liabilities exceed its assets, and it should no longer operate. It should enter what is called Chapter 11 Bankruptcy Protection in the United States (US),” he said.

“Even major corporations like Ford have undergone bankruptcy protection, and the US government intervened to refinance them.”

Minister Salong said this is standard business practice, so portraying Vanuatu as struggling is a misunderstanding.

“It was a tough decision; no one wants to lose Vanuatu’s national carrier. Business is business, and decisions must be made. Based on the advice and wisdom of the Vanuatu Government, we engaged Ernst & Young (EY) Australia, known for successfully managing insolvent airlines globally, to oversee the process.

“The agreement is for them to ensure that every Air Vanuatu employee continues to work as usual and receives their regular pay on the 15th and 30th of each month. They are on the frontline,” Minister Salong said.

“Secondly, they will focus on risk management to ensure aircraft safety and public security.

“Thirdly, they will engage with suppliers, including Air Nauru and Solomon Airlines, airports in Australia, and banks, to restore confidence in Air Vanuatu, with BRED Bank backing the Vanuatu Government’s support for Air Vanuatu.

“EY Australia will conduct their assessment and provide a plan to the government and shareholders within approximately three months, offering options for a stronger airline in the future.

“In business terms, there are three main options: winding up (which we want to avoid), restructuring by eliminating non-viable parts, or trading out of difficulties. This is the standard approach when a business reaches the stage Air Vanuatu is in.

“Private investors have already expressed interest in purchasing shares since EY Australia’s arrival.

“So, this is not the time to look down, it is time to look up.”

Fiji Airways boosts capacity to Vanuatu

Meanwhile, Fiji Airways has implemented immediate measures to offer relief to customers affected by Air Vanuatu grounding its flights and filing for insolvency.

Any Fijian National currently holding an Air Vanuatu ticket purchased on or prior to 09.05.24 will be able to depart Port Vila for Nadi on a Fiji Airways flight at no extra cost. Rebooking and changes must be made before 24 May 2024.

Any Fijians in Vanuatu with specific assistance requests or due to travel in the next 48 hours are encouraged to contact the Fiji Airways GSA in Vanuatu directly on +678 22 836 or

These guests will have to present a copy of their Air Vanuatu ticket in order to secure a seat on a Fiji Airways flight from Port Vila to Nadi.

Company Managing Director and Chief Executive Officer Andre Viljoen says the airline is doing all it can to assist customers affected by the grounding of Air Vanuatu.

“As the national airline, Fiji Airways has a duty to assist Fijians where possible, and we will not waiver from this. We understand that this may be a difficult time for Fijian Nationals who have paid for an Air Vanuatu ticket which they can no longer redeem, therefore we will not charge them a fee to fly back home to Fiji.”

Fiji Airways has also increased capacity between Nadi and Port Vila with its Boeing 737 MAX fleet operating services this week.

Fiji Airways is also working on measures to assist non-Fiji Citizens who are holding Air Vanuatu tickets issued on or prior to 09 May 2024.

These customers will also be required to present a copy of their Air Vanuatu ticket in order to qualify for a discount. Rebooking and changes must be made before 24 May 2024.