Air Vanuatu's sole 737 'grounded'

[AnotherFSO]

FWIW, Flight Global is reporting that "Air Vanuatu has cancelled flights to Australia and New Zealand after mechanical issues forced the grounding of its sole Boeing 737-800."

[pbwhi0]

Yep, we are booked to fly on this aircraft on Tuesday 11 April 2023. The Air Vanuatu website is indicating it would be Tuesday 11 April at the earliest that the aircraft is back in the air.

Our only viable option is to book a flight on Monday with Virgin (accomodation cannnot be changed). But if the Air Vanuatu 737 is back on Tuesday that would be our preferred solution.

Does any one have any inside information on the repair and when it is likely the aircraft will be cleared to line?

Our travel agent is following up but info is sketchy at best.

Thanks

[TBM-Legend]

Aircraft parked at Nauru Airlines facilities BNE

[kitchen bench]

Aircraft parked at Nauru Airlines facilities BNE

And, according to FR24, Nauru Airlines has done some Vila flying using the Air Vanuatu call sign. It appears they’ve got a replacement aircraft in place until theirs returns.

Latest update on their website specifically shows Tuesday’s Brisbane to Vila flight operating so, pbwhi0, I reckon you’ll be travelling as planned.

[V-Jet]

Does anyone know why Air Van is constantly cancelling flights? General incompetence, lack of cash - any ideas?

[nomess]

737 had a 4 week check in Jan which has blown out to 12 weeks. Got caught out as Nauru who was covering some of it already had Bonza work tied up for a few months when that ended. Solomon has been covering.

Solomon A320 now broken in Melbourne.

[V-Jet]

They seem to have a major problem getting 737 work done. Maggots grow on trees in these parts - it’s a rolling disaster for tourism there. There are undiscovered tribes in the Amazon that would have 737 supplies! Apparently it’s grounded until April. Be great airline to work for, only two VLI-SYD-VLI and VLI-MEL-VLI trips a year!!

[deja vu]

Does anyone know why Air Van is constantly cancelling flights? General incompetence, lack of cash - any ideas?
One sole lone aircraft would be the first clue.

[blubak]

One sole lone aircraft would be the first clue.
I was told a few days ago that when the fan blades were removed the engine inlet covers were not fitted & this has caused a lot of damage.
Apparently this task is a must do on the CFM56 fitted to the 738 & on this check, it wasnt done.

[V-Jet]

Interesting. One jet certainly doesn’t help but it’s not the only answer, Avoidable maintenance errors don’t help!

[tail wheel]

The original concept of Air Pacific was that it would become the Pacific airline. I think Qantas, British Airways, Fiji Government were major shareholders but each of the small island groups owned a small share.

National pride eventually got in the way of ultimately having a unified Pacific airline.

[nivsy]

In happier times ....
https://cimg9.ibsrv.net/gimg/pprune.org-vbulletin/1661x1473/img_20230910_153901262_5_0e1e2d3da92d01217d8ca5256d8a888db7d 64720.jpg

[markis10]

The original concept of Air Pacific was that it would become the Pacific airline. I think Qantas, British Airways, Fiji Government were major shareholders but each of the small island groups owned a small share.

National pride eventually got in the way of ultimately having a unified Pacific airline.

Still quite a few countries in the Air Pacific Pie which is the overall entity sitting on top of Fiji Air: “Fijian government (51%), the Australian flag-carrier Qantas (46.32%), and Air New Zealand and the governments of Kiribati, Tonga, Nauru and Samoa each hold minor stakes”

[V-Jet]

And now under Voluntary Administration.


Vanuatu Daily Post has been informed yesterday afternoon by Alain Lew, Chairman of the Air Vanuatu Board, that the Air Vanuatu Board no longer exists since the appointment of an Administrator.

Mr. Lew, who chaired the new Air Vanuatu board appointed after Prime Minister Charlot Salwal formed the current government, said an administrator was appointed on May 6, but he did not specify who.

This information was revealed when the Daily Post Newspaper was seeking confirmation on reports that Air Vanuatu has gone into Voluntary Administration and is to be administered by an Accounting Company named Ernst & Young.

When asked for confirmation from the Government of Vanuatu through the Director General (DG) of the Prime Minister’s Office, Cherol Ala, she responded that a press statement would be released when Ernst & Young is on the ground.

Ernst & Young has also been contacted but has not yet responded.

Last month, a former Minister of Infrastructure and Public Utilities reported that Air Vanuatu is facing a serious situation of bankruptcy.

The national airline is currently operating with a Chief Executive Officer (CEO) who allegedly holds the position only because no one else wants to take on the role, given the airline’s continuous state of decline.

Many attempts over the past months to get the members of the Air Vanuatu Board and CEO to address allegations have been hugely unsuccessful as the responsible individuals and Air Vanuatu have not responded, despite the demand from the public concerning Air Vanuatu issues.

More recently, it has emerged that the national flag carrier is facing liquidation proceedings due to legal actions initiated by Isleno Leasing Company Limited (Ltd) over unresolved financial obligations.

This follows a Court of Appeal (COA) judgment (Air Vanuatu Operation Ltd v Isleno Leasing Co Ltd) issued in 2018, which was only released this February after submissions to delay its release until an associated criminal case was heard.

The criminal case has since been heard, and the verdict delivered, leading to the release of the judgment on February 16, 2024.

The COA dismissed the appeal by Air Vanuatu (Operations) Ltd (AVL), which sought to set aside the judgment given in the Supreme Court in favour of Isleno, awarding damages in the order of VT150 million on an interim basis.

The parties had been in litigation since late 2009 over the lease of an aircraft by Air Vanuatu (Operations) Ltd (AVL) from Isleno Leasing Company Ltd, until the release of the COA judgement in February this year.

While the government is expected to provide more transparent answers on Air Vanuatu’s status shortly, it will also confirm whether or not Air Vanuatu has entered Voluntary Administration.

Voluntary Administration is designed to resolve a company’s future as an independent voluntary administrator takes full control of the company.

This allows the director or a third party time to find a way, if possible, to save the company or its business.

The voluntary administrator’s role is to investigate and report to creditors about the company’s business, property, affairs, and financial circumstances. They also manage the end of the voluntary administration and return the company to the directors’ control, approve a Deed of Company Arrangement (DOCA) through which the company will pay all or part of its debts and then be free of those debts, wind up the company, and appoint a liquidator.

A liquidator is a person with the legal authority to act on behalf of a company to sell the company’s assets before the company closes in order to generate cash for various reasons, including debt repayment.

While reliable sources have provided insights on Air Vanuatu, official responses from both the government and Air Vanuatu remain elusive despite persistent inquiries.

[nomess]

I recall 40% of the nations debt is financed by China. So expect some chatter between the two.

They should just offload the flying to Virgin. I recall Samoa in the past contracted to Virgin for a 10 year term.

[MalcolmReynolds]

Watch now as China come in as a "benefactor" in return for military bases in Vanuatu. Same trick they play every time across the world. They get a country owing them billions then offer to clear all or part of the debt in return for strategic bases there.

[V-Jet]

In the AFR. Behind a paywall but the playbook is all too familiar…
Chinese debt trap diplomacy blamed for grounding Vanuatu airlineAndrew Tillett (https://www.afr.com/by/andrew-tillett-gw5pow) and Ayesha de Kretser (https://www.afr.com/by/ayesha-de-kretser-p535y1)May 10, 2024
The collapse of Vanuatu’s national airline is being linked to the Pacific Island’s indebtedness to Chinese Belt and Road Initiative infrastructure projects, with pressure on the Albanese government to bail it out.

Air Vanuatu slipped into voluntary liquidation on Friday after suddenly cancelling dozens of its international flights, with airlines across the Pacific rushing to help rescue stranded passengers.

[tcas_test]

Chinese debt trap diplomacy blamed for grounding Vanuatu airlineMay 10, 2024 – 5.28pm
The collapse of Vanuatu’s national airline is being linked to the Pacific Island’s indebtedness to Chinese Belt and Road Initiative infrastructure projects, with pressure on the Albanese government to bail it out.Air Vanuatu slipped into voluntary liquidation on Friday after suddenly cancelling dozens of its international flights, with airlines across the Pacific rushing to help rescue stranded passengers.

The Australian government is not planning any repatriation flights, although has asked Virgin Australia to increase its services to the island nation.

The grounding comes just days after Australian low-cost carrier Bonza entered voluntary administration, as its financial backers face heightened scrutiny of ties with its senior funders.

EY Australia was appointed liquidator on Friday after Air Vanuatu had been financially tottering for months, with sources saying the business had been starved of cash by its owner, Vanuatu’s government.
AFR Weekend has been told politicians have been cutting costs across the government as they scrambled to meet loan repayments to China for infrastructure under President Xi Jinping’s signature Belt and Road Initiative, a vehicle for building Chinese influence in developing countries.

According to the Lowy Institute’s Pacific Aid Map, China has been the second-biggest benefactor of finance to Vanuatu after Australia, providing $483 million in aid and loans.

The biggest loan was for a $90 million port project, the construction of the South Pacific’s biggest wharf at Luganville to accommodate cruise ships.

Critics have accused China of “debt trap diplomacy”, saddling impoverished nations with loans they ultimately cannot afford to repay.

On the prospect of a bailout for Air Vanuatu, one source said: “The only question here is who comes in? Is it Australia or is it China? And who comes in first because the longer this drags on, the worst it is for Air Vanuatu and the islands.”

The Department of Foreign Affairs and Trade would not be drawn on whether a bailout was under consideration.

“The Department of Foreign Affairs and Trade is in contact with the government of Vanuatu as it manages its current aviation challenges,” DFAT said in a statement.

“The financial viability of Air Vanuatu is a matter for the government of Vanuatu and EY.”

Liquidator Morgan Kelly said: “We’re working with all stakeholders, including relevant government authorities, to secure a viable future for the airline.”

Air Vanuatu operates four planes, including a Boeing 737 for international routes. The airline began cancelling flights on Wednesday, citing “extended maintenance requirements”.

EY said it would conduct safety and maintenance checks before the resumption of normal operations and the airline’s existing management team would remain in place.

A Virgin Australia spokesman said it would increase flights from two to five for the rest of May and June at the Australian government’s request, with more flights to go on sale from Friday.

“Virgin Australia has simultaneously applied to the International Air Services Commission to increase our allocation of seat capacity between Australia and Vanuatu, with plans to quickly commence a further seven weekly services from east coast gateways into Vanuatu, supporting continued connectivity with our Pacific neighbours,” he said.

Fiji Airways said on Friday it had increased capacity between Nadi and Port Vila with bigger planes, replacing ATR 72-seater aircraft with Boeing 737s, adding an extra 110 seats per flight.

Fiji Airways chief executive Andre Viljoen said the airline was doing its best to help those affected, with Fiji offering discounted seats to customers of Air Vanuatu.

“We understand that this may be a difficult time for travellers who have paid for an Air Vanuatu ticket which they can no longer redeem, therefore we are working to allow travellers to return home,” said Mr Viljoen.

“Tourists and Fijians who want to return home can rest assured there will be enough flights and seats to cater for everyone,” Mr Viljoen added.

Qantas does not operate flights to Vanuatu but said it would help any passenger who booked a codeshare flight on Air Vanuatu to find alternate carriers.

[kitchen bench]

https://www.afr.com/street-talk/nauru-airlines-flies-in-for-a-look-at-collapsed-air-vanuatu-20240516-p5je6h

That will take a lot of dollars ….. er, renmimbi.

Can anyone get the article from behind the paywall and post it?

[kitchen bench]

Some further mentions of Nauru Airlines alleged interest:

https://www.travelweekly.com.au/article/situation-dire-for-air-vanuatu-as-rival-carriers-look-to-swoop-on-flailing-airline/

https://www.travelweekly.com.au/article/situation-dire-for-air-vanuatu-as-rival-carriers-look-to-swoop-on-flailing-airline/


And another paywall to crack ….

https://www.afr.com/companies/transport/liquidators-say-a-clearly-broke-air-vanuatu-owes-at-least-99m-20240516-p5je5y

[Chris2303]

https://www.afr.com/street-talk/nauru-airlines-flies-in-for-a-look-at-collapsed-air-vanuatu-20240516-p5je6h

That will take a lot of dollars ….. er, renmimbi.

Can anyone get the article from behind the paywall and post it?A bidding war is kicking off in the South Pacific.

Street Talk understands Nauru Airlines, the flag carrier of Nauru, has entered the race for Air Vanuatu – which collapsed into liquidation on Friday (https://www.afr.com/politics/federal/chinese-debt-trap-diplomacy-blamed-for-grounding-vanuatu-airline-20240510-p5jcn1). It’s unsurprising that Nauru Airlines is around the situation, having recently leased a Boeing 737 to Air Vanuatu.

EY, the liquidators, declined to comment when contacted by Street Talk.
https://static.ffx.io/images/w_960/1b107b79f2432daedd5cb0aba86bdb1b324ab0e6Air Vanuatu slipped into voluntary liquidation last week after suddenly cancelling dozens of its international flights. IstockThe Australian Financial Review reported on Wednesday (https://www.afr.com/companies/transport/fiji-airways-keen-to-keep-virgin-australia-at-bay-20240515-p5jdv0) that Fiji Airways has also shown interest in Air Vanuatu, hoping to limit Virgin Australia’s growth in the region. Fiji Airways and Virgin Australia have both added extra flights to Vanuatu to help travellers after Air Vanuatu cancelled dozens of flights.

EY has been called in to manage the process with liquidators Morgan Kelly, Andrew Hanson and Justin Walsh handing down a creditors report on Wednesday. Its initial estimate (https://www.afr.com/companies/transport/liquidators-say-a-clearly-broke-air-vanuatu-owes-at-least-99m-20240516-p5je5y) suggests Air Vanuatu owes $US73.5 million ($110 million). “The company’s financial position is dire, and it clearly cannot fund its own operations,” they wrote.

Nauru Airlines is a wholly state-owned enterprise. It operates a seven-plane fleet and flies to destinations such as Brisbane, Nadi in Fiji and Majuro in the Marshall Islands.

The process is expected to draw interest from the federal government which has stepped up its efforts to counter Beijing’s rising influence in the region.

Nauru Airlines is deeply enmeshed with Taiwan, signing a $US25 million loan agreement with Taipei’s Export-Import Bank of ROC in 2021 to help it buy and lease aircraft, financial reports issued by Nauru’s Finance Ministry show. So far, two repayments have been made totalling $1 million.

However, earlier this year (https://www.afr.com/world/asia/nauru-cuts-diplomatic-ties-with-taiwan-for-china-20240115-p5exh4), Nauru severed ties with Taiwan and switched its diplomatic allegiances to China. It is unclear how that has affected Nauru Airlines.

Air Vanuatu’s collapse has been linked to Vanuatu’s indebtedness to Chinese Belt and Road Initiative (https://www.afr.com/politics/federal/chinese-debt-trap-diplomacy-blamed-for-grounding-vanuatu-airline-20240510-p5jcn1) infrastructure projects.

Air Vanuatu’s only Boeing 737 is in Melbourne after being repossessed. Of its five smaller planes, only two are considered “flight-ready”. The airline has 400 staff across Australia, New Zealand and Vanuatu. The valuable piece for a would-be bidder isn’t necessarily the airplanes or operations, but the right to fly to the island, a big draw for tourists.

The grounding comes just days after Australian low-cost carrier Bonza entered voluntary administration. As reported (https://www.afr.com/companies/transport/bonza-hopes-fade-as-vietjet-walks-from-deal-talks-20240513-p5jd35), administrator Hall Chadwick is in talks with a handful of buyers who have expressed interest – although with few assets, it is unclear what exactly is being sold. The airline owes more than $100 million to backers, customers and staff. Bonza’s fleet of aircraft had been 49 per cent held by private equity firm 777 Partners and 51 per cent owned by the management of AIP Capital.

Air Vanuatu’s first creditors’ meeting is scheduled for May 22.

[Chris2303]

And another paywall to crack ….

https://www.afr.com/companies/transport/liquidators-say-a-clearly-broke-air-vanuatu-owes-at-least-99m-20240516-p5je5yAir Vanuatu’s administrators say the airline was “clearly not in a position to meet its financial commitments” well before it collapsed earlier this month, and is more than $99 million short of being able to pay back its customers, staff and lenders in full.

In a lengthy report to creditors, EY, the company’s liquidators, said Air Vanuatu had a “high-cost base for the size of … operations” and “a significant level of debt”, employing “a high number of staff for an operation of size and nature”.
https://static.ffx.io/images/w_960/1b107b79f2432daedd5cb0aba86bdb1b324ab0e6Air Vanuatu’s single Boeing 737-800 has been out of action since March. IstockAir Vanuatu has been financially supported by the Vanuatu government for some time.

[i]AFR Weekend reported that governments in the Pacific indebted to Beijing for Belt and Road Initiative infrastructure spending have begun cutting costs, which sources said was one reason why a financial lifeline to the carrier had been cut.

Air Vanuatu flew to Brisbane, Sydney, Melbourne and Auckland, as well as Nadi in Fiji and Noumea in New Caledonia, and operated a small domestic fleet.

The airline fell into liquidation last Friday after cancelling dozens of its international flights, with airlines across the Pacific rushing to help rescue stranded passengers.

The Australian Financial Review reported on Wednesday that Fiji Airways was interested in acquiring Air Vanuatu. Fiji Airways and Virgin Australia have added extra flights to Vanuatu to help travellers stuck in Port Vila.

On Thursday, the Financial Review’s Street Talk column reported Nauru Airlines was also interested in some of Air Vanuatu’s assets.

Nauru Airlines is a wholly state-owned enterprise. It operates a seven-plane fleet and flies to destinations such as Brisbane, Nadi and Majuro in the Marshall Islands.

Earlier this week, Virgin applied to the International Air Services Commission for permission to fly seven more services a week from July, after the Department of Foreign Affairs and Trade asked the airline for assistance.

In its report to creditors, EY said Air Vanuatu had been “unable to meet the costs of parts critical to the fleet’s operation (resulting in aircraft being grounded for extended periods of time), and encountered issues, such as defaulting under supplier arrangements”.

“The company’s financial position is dire, and it clearly cannot fund its own operations.”

Its initial estimates suggest the company owes $US73.5 million ($110 million) – a figure that does not consider employee entitlements but does include a $US21.8 million loan from the government – but has a shortfall of $US65.9 million to pay all creditors.

“The liquidators understand that prior to the liquidators’ appointment, the government had been providing continual financial support to assist the airline and its operations through the financial challenges,” the report, authored by EY’s Morgan Kelly, Andrew Hanson and Justin Walsh, reads.

“We note that due to the poor state of the company’s financial records, we are unable to verify whether this information is accurate.”

According to the Lowy Institute’s Pacific Aid Map, China has been the second-biggest benefactor of finance to Vanuatu after Australia, providing $483 million in aid and loans.

Critics have accused authorities in China of “debt-trap diplomacy” (https://www.afr.com/politics/federal/chinese-debt-for-pacific-nations-a-security-risk-wong-20220616-p5au6g), saddling impoverished nations with loans they ultimately cannot afford to repay.

Air Vanuatu’s only Boeing 737 is in Melbourne after being repossessed. Of its five smaller planes, only two are considered “flight ready”.

[nomess]

Critics have accused authorities in China of “debt-trap diplomacy” (https://www.afr.com/politics/federal/chinese-debt-for-pacific-nations-a-security-risk-wong-20220616-p5au6g), saddling impoverished nations with loans they ultimately cannot afford to repay.


It’s all going to plan then. Send them broke then sit on the sidelines and ‘wait’ for the phone call to ‘rescue us’. Generally it’s Australian taxpayers that step in before that occurs and we foot the bill. You could say China has us by the balls also.

[kitchen bench]

Can anyone get the article from behind the paywall and post it?

Thanks Chris2303,

KB.

[geeup]

Who would honestly want the business?
Fiji Airways has enough of their own work.
Air Nauru is financed to the hilt.
Virgin have to outsource their own work.

It’s a basket case that will be bailed out by AusAid and fail again

[nomess]

The costs to run a one aircraft operation without government money isn’t viable on its own accord, if one intends to make profit.

Samoa Airways was another one that didn’t even launch. Rex picked up the 737.

Just let Fiji or Virgin run the services.

[Mach E Avelli]

It’s all going to plan then. Send them broke then sit on the sidelines and ‘wait’ for the phone call to ‘rescue us’. Generally it’s Australian taxpayers that step in before that occurs and we foot the bill. You could say China has us by the balls also.
Except no-one 'sends them broke'. These pissant Pacific nations send themselves broke with grandiose dreams that they can run airlines at a profit. It's an ego thing for the politicians who must fly the national flag no matter what it costs.

[Car RAMROD]

Except no-one 'sends them broke'. These pissant Pacific nations send themselves broke with grandiose dreams that they can run airlines at a profit. It's an ego thing for the politicians who must fly the national flag no matter what it costs.


Not always the politicians. Management in charge quite often have grandiose ambitions that they con the locals into believing too. It’s happened before, it will no doubt happen again.

[nomess]

True. These nations want the cake and they gloat about wishing to eat it too.

Samoa was a classic example. Virgin sent them a $6m dividend as part of its services it was offering for the government. They said it wasn’t enough. They also said they weren’t getting enough benefits from Virgin. Something then about they wish to wave the flag and start our own airline.

They then signed a 737 lease and bankrupt themselves before it even started.

Should have kept the Virgin deal going, at least it was cash positive.

[well goodness me]

A development?

From Ch.aviation site, can't open it

Nauru Airlines eyeing move into Vanuatu, MOU signed.

[minigundiplomat]

These pissant Pacific nations send themselves broke with grandiose dreams that they can run airlines at a profit. It's an ego thing for the politicians who must fly the national flag no matter what it costs.

Ansett.
Bonza.
Rex.
VA.
Qantas.

All have had huge sums of taxpayer cash funnelled into them to keep them afloat, or until someone eventually bullets them. it seems its not just the Pacific - Coral Sea, Tasman and Southern Ocean nations too.