Air Vanuatu placed into administration following ‘challenging period’ for aviation industry

Air Vanuatu has officially been placed into voluntary liquidation following a “challenging period” for the global aviation industry.

EY Australia has taken control of the airline, which on Thursday cancelled three days’ worth of flights to and from the Pacific island nation, as voluntary liquidators.

A statement released on Friday blamed the move on “labour shortages, inflation affecting input costs and a global increasing cost of credit environment”.

“Air Vanuatu has (also) been particularly affected by disruption of tourism activity due to cyclones.”

Liquidators Morgan Kelly, Justin Walsh and Andrew Hanson’s first steps will be to conduct safety and maintenance checks “before the resumption of normal operations”.

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

“Affected travellers will be informed of this disruption and rebooked on flights as soon as operations resume.”

Mr Kelly said Air Vanuatu was “critical and strategically important” to the Republic of Vanuatu.

“The outlook for the airline is positive, despite pressures on the broader industry, and we will be focused on securing the future of this strategically vital national carrier,” he said.

The airline operates four planes, including one Boeing 737 and three turboprop planes.

The first meeting of creditors is set to be announced shortly.

Australia’s national carrier Qantas does not operate flights into Vanuatu but has a codeshare agreement with the airline to link passengers to the nation.

Qantas said it was supporting customers impacted by the cancellations to find alternative flights.

It also encouraged any customers with bookings on Air Vanuatu between now and the end of May to contact their flight provider for refunds.

Virgin Australia is the only other Australian airline to fly into Vanuatu with its scheduled flights continuing to go ahead.

Australia’s Smartraveller website published an update stating the airline and its codeshare partners had cancelled or rescheduled flights for the coming days, urging those affected to contact the airline, their travel agent or insurance company.

Sydney and Brisbane airports urged passengers on Air Vanuatu flights not to travel to the airport amid the cancellations.

The airline’s struggles come after new Australian budget start-up Bonza collapsed with the airline just entering operations over a year ago.

Bonza’s fleet of planes has begun to be removed from Australia before the airline’s financial crisis is laid bare at a creditors’ meeting.

Customers can stay up to date on the latest flight cancellations and changes via Air Vanuatu’s website here.

— With AAP