Air Vanuatu, the national airline of the South Pacific nation, has filed for bankruptcy protection following the abrupt cancellation of all international flights, leaving thousands of travelers stranded. The move came into effect on May 10, immediately after the airline ceased operations on multiple routes, including those to Sydney, Brisbane, and Auckland due to extended maintenance needs.
The company, experiencing significant operational hurdles, has appointed Morgan Kelly, Justin Walsh, and Andrew Hanson from Ernst & Young Australia as liquidators. This decision parallels the U.S. Chapter 11 bankruptcy proceedings, aiming to allow the airline to continue operations while reorganizing its finances.
Despite the challenges, the management team remains intact with a firm commitment to restoring service. "Air Vanuatu is a cornerstone of connectivity for the Republic of Vanuatu and plays a crucial role in the national economy," stated Kelly. He emphasized the ongoing efforts to ensure service continuity and operational normalization.
The disruption has heavily impacted tourists and the local economy, with tourism accounting for 40% of Vanuatu’s GDP. The Vanuatu Tourism Office has issued apologies and promises frequent updates as they collaborate with neighboring airlines such as Virgin Australia and Fiji Airways to accommodate displaced passengers.
Liquidator Kelly highlighted the broader industry pressures contributing to the airline's financial woes, including labor shortages, rising costs, higher interest rates, and the adverse effects of tropical cyclones on tourism. "We are exploring all available options, including potential sales or partnerships, to sustainably resume operations," Kelly explained.
This situation has left many travelers in difficult positions, like Australian tourist Sally Witchalls, who found herself unexpectedly extending her stay in Port Vila due to the cancellations and uncovered travel insurance. She and many others are now facing the challenge of arranging and funding extended accommodations while awaiting further developments from Air Vanuatu.
