Port Vila, Vanuatu – May 31, 2024 – In a significant move to tackle its financial woes, Air Vanuatu has laid off nearly 200 employees as part of a major restructuring effort. The national airline, which employed 441 staff before entering liquidation on May 9, has reduced its workforce by approximately 170 employees in an attempt to cut operating costs.
The affected staff were informed of their redundancies on Monday morning. Morgan Kelly, a liquidator from Ernst & Young Australia, explained the necessity of these layoffs. "The restructuring at Air Vanuatu today is an unfortunate but necessary step to give the business the opportunity to bring on board new investors and capitalis
e on strong domestic and international demand for travel," Kelly stated. "This restructuring attempts to position Air Vanuatu for growth into the future."
Despite the drastic measures, the liquidators are determined to find a solution that will keep Air Vanuatu afloat. "We share the Vanuatuan government's view of strong demand for tourism driving international demand, and this to support demand for key domestic routes," Kelly added. The restructuring effort is also overseen by Justin Walsh and Andrew Hanson, who were appointed as liquidators alongside Kelly.
Air Vanuatu holds valuable international airport slots in major cities such as Brisbane, Melbourne, Sydney, Auckland, New Caledonia, and Fiji. However, it remains uncertain if the airline will be able to continue its operations moving forward.
The layoffs mark a challenging period for the airline, which plays a crucial role in Vanuatu's connectivity and tourism industry. The liquidators are actively seeking potential buyers or investors to recapitalise the airline, hoping to stabilise its operations and secure its long-term future.
As the aviation sector worldwide continues to recover from unprecedented challenges, Air Vanuatu’s restructuring highlights the ongoing struggles faced by airlines globally. Further updates on the airline's potential sale or recapitalisation are anticipated in the coming weeks as efforts to revive its fortunes continue.
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