Vanuatu Prime Minister Charlot Salwai reaffirmed the government’s commitment to securing the future of Air Vanuatu and its employees on Independence Day, acknowledging the challenges and criticism along the way.
He said the government deemed it necessary for the national airline to undergo voluntary liquidation due to its current situation.
He conveyed that the government is yet to receive the full report from Ernest & Young (EY), as the liquidator.
He said the report will outline the reasons for liquidation and provide recommendations on the organisational structure the airline should adopt to avoid repeating past mistakes.
“Indeed, the impact of the government’s decision has affected the economy.
“However, despite challenges and criticism, the government is committed to finding solutions to support the future of Air Vanuatu and its employees,” he said.
“The government has already taken step to restore the domestic fleet servicing our islands. This would help revive the tourism industry.”
The PM said air and land transport connectivity is crucial for economic growth.
“We need to improve infrastructure management and transport connectivity to support economic trends in trade, tourism, and efficient delivery of goods and services across our islands.
“This will support development and prosperity within each province and our islands,” he said.
PM Salwai acknowledge the governments of Fiji, Solomon Islands, Nauru and especially Australia for their quick assistance in addressing connectivity issues between Vanuatu and the region.
He also mentioned that the government of Papua New Guinea (PNG) has decided for its national airline, Air Niugini, to resume its flights to Port Vila.
Air Niugini’s weekly service between Port Moresby and Port Vila, via Solomon Honiara, recommences this Saturday. The flights will be every Saturday.
A delegation led by PNG’s National Capital District Governor, Powes Parkop, who arrived for the Sister-City Agreement with Port Vila City coinciding with the independence celebration, will depart on the inaugural return flight.
Meanwhile, the Vanuatu Daily Post has learned that one, or possibly two, European investors are showing interest in acquiring a stake in Air Vanuatu or V3, as the airline is currently being referred to.
It was informed that these potential investors are being privately briefed by Air Vanuatu’s current executive management and Ernst & Young (EY), even before the deed of approval by the creditors—ex-employees who have not been paid their full legal entitlements and have sought legal representation—and before the preferred bidder has been announced.
The European investors are reportedly focused on operating international flights exclusively with Airbus aircraft and Air Vanuatu or V3 is set to compete against major carriers such as Virgin, Qantas, Jetstar, and Solomon Airlines.
In related news, it was also reported that in May this year, a senior Airbus regional representative reached out to a Vanuatu Government representative in Australia.
This contact was partially due to difficulties in communicating with Air Vanuatu’s current executive management at a recent Association of South Pacific Airlines (ASPA) meeting in Fiji.
The Airbus expressed a desire to collaborate only with a stable aviation organisation and government to utilise the USD$19 million (VT2.2 billion) credit ultimately held by the people of Vanuatu.
The question remains: are these potential investors from a distant and vastly different culture being enticed to invest and capture the Air Vanuatu Airbus credit?
Adding to the complexity, it was also reported that 11 former 737-800 Boeing pilots (creditors) have allegedly initiated legal proceedings against Air Vanuatu Operations Limited (AVOL) and EY, having received only 5 percent of their legal redundancy entitlements.
Additionally, several Air Vanuatu staff members based in Australia who were made redundant have allegedly sent letters to the Australian Minister for the SWP, the Australian Minister for Foreign Affairs, and Department of Foreign Affairs and Trade (DFAT).
In their correspondence, they detailed the underpayment of their legal entitlements by the Vanuatu Government and requested a prompt resolution or a halt to all Australian taxpayer funding to Vanuatu.
When contacted, Minister of Finance John Salong said it is unlikely that the Airbus deposit is part of AVOL’s assets under EY.
“There is a task force set up by the Prime Minister, chaired by Cherol Ala, the Director General (DG) of the Prime Minister’s Office (PMO), which is working with Airbus to resolve the issue,” he told the Vanuatu Daily Post.
“Any bidders have been involved since they signed the Non-Disclosure Agreements and entered the data room set up by EY in June 2024.
“Running an airline is not governed by Vanuatu’s cultural norms; it is subject to Civil Aviation Regulations and Commercial Principles.
“Ex-employees (175) were paid their full severance when they were made redundant at the end of May,” he said.