With a permanent population of just under 330,000, the small island country of Vanuatu relies heavily on flights for everything from bringing in supplies to getting on and off the island.
The nearest country, New Caledonia, is more than 400 miles away in the South Pacific Ocean, while Brisbane, Australia, is approximately 1,200 miles away and a two-hour, 40-minute flight away.
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That's why the sudden bankruptcy filing of flagship airline Air Vanuatu and the cancellation of same-day flights in May 2024 left many fearing the isolated nation would be left without an airline.
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Once close to liquidation, Air Vanuatu is making a comeback
Australia-based Ernst & Young liquidators Morgan Kelly, Andrew Hanson and Justin Walsh stepped in to guide the airline towards a turnaround plan or into liquidation.
This was a process that ended favorably for the airline, as a special purpose corporation owned by the Vanuatu Ministry of Foreign Affairs called AV3 Limited has now agreed to buy the airline, while EY relinquishes its role as liquidators and instead guides it. through restructuring. your debt.
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A commitment document filed by a local court states that Air Vanuatu's conditions to its creditors have already been met, while the first step of the restructuring involves a payment of $3.3 million to lessors. The first payment of $1.1 million will be made immediately, while the others will be made four and ten months later.
If those payments are not made, creditors, including international banks, could file a motion to dismiss the compromise deed which would put the airline back in need of liquidation.
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'An opportunity for Air Vanuatu's business to continue': Ernst & Young
“Implementation of the Deed of Commitment maximizes returns for creditors and presents an opportunity for Air Vanuatu's business to continue, saving jobs and providing vital aviation services to Vanuatu,” Kelly said of the plan. Kelly also previously called the existence of a Vanuatu-based airline “critical to the people of the Republic of Vanuatu and a strategically important business for the nation.”
The airline was officially declared out of liquidation on October 11, while some domestic flights have already been operating for several weeks. It has not yet committed to setting a timetable for restarting international flights to places like Australia, Singapore and New Caledonia, where most of its tourists come from.
When flights were suddenly canceled in May, tourists left behind on the island suddenly found themselves fighting for seats on some limited Singapore Airlines flights. (SINGF) or look for other options (and naturally very limited) to leave the island
A group of Australian student volunteers and organizers on a teaching trip ended up being rescued from the even smaller island of Tannu by a circling P&O Cruises Australia ship. The Discovery Paradise ship was on a 10-day “Discover Vanuatu” voyage, so the students were able to enjoy some additional stops in the South Pacific before returning to Sydney.
The initial bankruptcy announcement came after Air Vanuatu struggled to make repairs to the planes it needed to fly.
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