Air Vanuatu placed into voluntary liquidation

A major national airline has been placed into voluntary liquidation after it cancelled all flights to Australia and New Zealand on Thursday.

The Vanuatu government has placed Air Vanuatu into voluntary liquidation.

It comes after the airline cancelled its flights to and from Sydney, Brisbane and Auckland on Thursday, to at least Sunday, with flights after this date under review.

Morgan Kelly, Justin Walsh, and Andrew Hanson of Ernest & Young Australia (EY) have been appointed voluntary liquidators of the airline and took control of the business on Friday.

The fleet has been grounded to allow representatives of EY, currently in the island nation, to conduct safety and maintenance checks of the fleet.

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

The Vanuatu government has today placed Air Vanuatu into voluntary liquidation.

“Air Vanuatu is critical to the people of the Republic of Vanuatu and a strategically important business to the nation,” Mr Kelly, partner in strategy & transactions at EY said.

“Our team is working closely with management to ensure continuity of service to customers and to ensure services continue as seamlessly as possible.”

Mr Kelly is hopeful for the future of the airline, adding that outlook is “positive”, despite pressures on the broader industry.

“[And] we will be focused on securing the future of this strategically vital national carrier.”

According to EY, the appointment follows a challenging period for the global aviation industry, including labour shortages, inflation affecting input costs and a global increasing cost of credit environment.

“Air Vanuatu has been particularly affected by disruption of tourism activity due to cyclones,” EY said in a statement.

The fleet has been grounded to allow the liquidators – Ernest & Young Australia – to conduct safety and maintenance checks ‘before the resumption of normal operations’.

EY said affected travellers will be informed of this disruption and rebooked on flights as soon as operations resume.

“The existing management team will remain in place and will work closely with the liquidators through this process,” the statement read.

The first meeting of creditors will be scheduled shortly.

Qantas, which does not operate flights into Vanuatu but has a codeshare partnership with Air Vanuatu, said it was supporting codeshare customers who were impacted.

Qantas customers who are booked on an Air Vanuatu flight between now and May 31 are instructed to call Qantas or their travel agent to discuss options including refunds or a flight credit.

📣 PSA: We are aware Air Vanuatu has cancelled its Brisbane flights for today & tomorrow. Passengers scheduled to fly with Air Vanuatu today or tomorrow should not travel to the airport. Please contact Air Vanuatu Customer Support & stay alert for updates. pic.twitter.com/IIGmJMLpUe

— Brisbane Airport ✈️ (@BrisbaneAirport) May 9, 2024

The Australian carrier said it would book customers who are mid-journey onto alternative flights.

Earlier on Thursday concerns began circulating about the fate of the company after it cancelled flights and local newspaper Vanuatu Daily Post reported it was informed the Air Vanuatu board had been dissolved and an administrator was appointed on May 6.

The publication said the news followed a former minister of infrastructure and public utilities reporting last month that Air Vanuatu is facing “a serious situation of bankruptcy”.

Brisbane Airport said it was aware flights had been cancelled on Thursday and Friday, and has warned passengers scheduled to fly with the airline that they should not travel to the airport.

Sydney Airport issued the same warning for flights on Friday and across the weekend.

“We advise passengers who are booked on these flights to contact Air Vanuatu’s customer assistance team and not to turn up at the airport as the flights are cancelled,” a spokesperson said.

The Vanuatu Tourism Office said in a statement it was aware of reports that its national carrier has entered voluntary administration and called it an “evolving situation”.

It comes just days after the collapse of Australian airline Bonza, less than 18 months after launching its first flights.

Almost 60,000 Bonza customers have been left out of pocket following the collapse, a court has heard.

A court heard on Tuesday that the company had more than 60,000 creditors – including 323 employees who were owed wages and annual leave and 120 trade creditors.

There were a further 57,933 customers who had bookings with the company, barrister James Hutton SC, who is acting for the administrators, told the Federal Court on Tuesday morning.

– with Chantelle Francis