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Air Vanuatu Under Direct Government Control

The Vanuatu Government has taken control of Air Vanuatu after firing its board of directors. Partial privatisation is being considered amongst efforts to save the state-owned airline from bankruptcy. “The
05 Apr 2021 10:00
Air Vanuatu Under Direct Government Control
Air Vanuatu has ordered four Airbus A220s ... the Government wants to reduce the order to two.

The Vanuatu Government has taken control of Air Vanuatu after firing its board of directors.

Partial privatisation is being considered amongst efforts to save the state-owned airline from bankruptcy.

“The situation of the airline is very, very critical, that’s why we took this decision,” Finance Minister Johnny Koanapo said.

He confirmed that chief executive officer Atu Finau remained in office to manage the airline.

But the Government had taken control of the board and the Finance Ministry had taken over the financial control.

He said the Government intended to restructure and partially privatise the company.

Meanwhile, the Council of Ministers would be asked to approve emergency state funding totalling VUV700 million (FJ$13.28 million) for Air Vanuatu, which in turn would have to be approved by parliament at its sitting next month.

Of the amount, VUV400 million (FJ$7.47million) was needed to pay the airline’s 200 employees, and the rest to keep creditors at bay.

This followed a state guarantee worth VUV592.3 million (FJ$11.0 million) issued in December 2020 to mitigate the carrier’s years of compounding debt.

The minister said the airline’s problems were historical, which included political interference, negligence, an over-enthusiastic approach by previous management that committed the airline very heavily beyond its financial capacity.

A commission of inquiry is probing decisions made by the former board to purchase four Airbus A220s (two A220-100s and two A220-300s).

The government wants to reduce the order to two aircraft.

The carrier currently has a fleet of three DHC-6-300s, one B737-800, one ATR72-600, and one BN-2.

Air Vanuatu has been restricted to operating domestic and occasional repatriation flights because of COVID-19.

Vanuatu’s borders have been closed to international travel since the start of the pandemic in March 2020.

Mr Koanapo said details of the restructuring would emerge once the shareholders had taken control of the situation.

The Government was confident the direction it was taking towards partial privatisation would result in a strong domestic airline with one or two regional routes servicing Fiji, New Caledonia, Australia, and New Zealand

 

Feedback: maraia.vula@fijisun.com.fj



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