Vanuatu has initiated the voluntary liquidation process for its national carrier, Air Vanuatu, following the cancellation of flights to Australia and New Zealand, resulting in stranded tourists.
The decision was made by the Pacific island nation's government subsequent to the arrival of representatives from accounting firm EY in Port Vila, who conducted initial financial assessments of the airline.
Air Vanuatu attributed the flight cancellations to extended maintenance requirements for its aircraft, affecting flights up to Sunday.
Liquidator EY stated that the priority is to resume normal operations promptly after conducting safety and maintenance checks.
All scheduled international flights by Air Vanuatu have been confirmed as cancelled, with future flights currently under review. Affected travelers will be rebooked once operations resume.
The airline operates just four planes servicing the country's islands, which heavily rely on tourism, as well as routes to Australia, New Zealand, and other South Pacific islands.
Reportedly, a Boeing 737 adorned in Air Vanuatu livery has been parked at Melbourne’s Tullamarine airport for several months.
Virgin Australia, alongside Air Vanuatu, offers scheduled passenger flights between Australia and Port Vila, with thrice-weekly flights from Brisbane.
In response to Air Vanuatu's grounding, the Australian government has requested Virgin Australia to increase capacity. Consequently, Virgin Australia will operate five times a week between Brisbane and Port Vila throughout May and June.
Additionally, Virgin Australia has applied for increased seating capacity between the two nations, aiming to launch seven weekly flights between east coast Australian cities like Sydney and Melbourne, previously served by Air Vanuatu, and Port Vila.
EY's appointment as liquidator follows a challenging period for the global aviation industry, including labor shortages and inflation affecting costs.
Despite industry pressures, Air Vanuatu remains strategically important to the Republic of Vanuatu. The first meeting of creditors will be scheduled shortly, while the current management team will continue to operate.
Although liquidation typically suggests closure, there's potential for Air Vanuatu's relaunch, given its government ownership structure.
Voluntary liquidation can serve as a method for companies to restructure operations and renegotiate financing and leasing terms.
Qantas Airways, an Australian carrier, has announced support for its code-share customers who were booked on Air Vanuatu flights.
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