Air Vanuatu put into voluntary liquidation, aims to resume operations

The airline has also applied to the International Air Services Commission to increase seat capacity to Vanuatu, with plans to add seven more services from Australia's east coast, it added in Friday's statement. Australian carrier Qantas Airways said it was supporting codeshare customers booked onto Air Vanuatu flights.

The national carrier of the Pacific Island nation of Vanuatu may be sold to a private operator, liquidator EY said on Friday, with large numbers of tourists stranded after Air Vanuatu cancelled flights to Australia and New Zealand. The Vanuatu government, which owns the airline, put the carrier into voluntary liquidation on Thursday, a day after it cancelled international flights, citing extended maintenance requirements for its aircraft.

"We may end up with some kind of sale of the business to a private operator," EY Strategy and Transactions Partner Morgan Kelly told a press conference in Sydney. As EY assesses how to make the airline's operations sustainable, a partnership arrangement with another airline could also be involved, Kelly added.

EY said it was working with the airline's management to resume normal operations as soon as possible after safety and maintenance checks, but it could not set a date. "All flights have been grounded with immediate effect," the carrier said in a notice on its website.

Many customers have been affected and partner airlines have suspended codeshare arrangements between Vanuatu and Australia, Kelly added. The carrier operates only four planes between the country's islands - which rely heavily on tourism - and to destinations such as Australia, New Zealand and other South Pacific islands.

EY said its appointment followed a challenging period for the global aviation industry, including labour shortages, inflation affecting input costs and credit costs. Vanuatu has been particularly affected after cyclones disrupted tourism activity.

The outlook for the airline is positive, despite pressures on the broader industry, and Air Vanuatu is a "strategically vital national carrier", EY said in a statement. The first meeting of creditors is to be set shortly, while the current management team will stay, it added.

In a statement, Virgin Australia said it would add two flights a week in May and June between Brisbane and Vanuatu, after the Australian government asked it to increase capacity. The airline has also applied to the International Air Services Commission to increase seat capacity to Vanuatu, with plans to add seven more services from Australia's east coast, it added in Friday's statement.

Australian carrier Qantas Airways said it was supporting codeshare customers booked onto Air Vanuatu flights. Fiji Airways has offered seats on its flights to stranded Fijian nationals holding Air Vanuatu tickets.

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