Air Vanuatu seeking bankruptcy after canceling week’s flights

MELBOURNE, Australia — Air Vanuatu filed for bankruptcy protection Friday, a day after the South Pacific state-owned carrier canceled all international flights, stranding thousands of travelers.

The airline Wednesday canceled more than 20 flights to and from the Australian cities of Sydney and Brisbane, along with the New Zealand city of Auckland, for the rest of the week. The airline said it was the result of “extended maintenance requirements” on its aircraft.

Ernst & Young Australia’s Morgan Kelly, Justin Walsh and Andrew Hanson were appointed liquidators in the equivalent of a U.S. Chapter 11 bankruptcy, the firm said in a statement. The liquidators said safety and maintenance checks would be made before normal operations resumed.

Kelly said the airline’s existing management team would remain in place.

“Air Vanuatu is critical to the people of the Republic of Vanuatu and a strategically important business to the nation,” Kelly said.

“Our team is working closely with management to ensure continuity of service to customers and to ensure services continue as seamlessly as possible,” Kelly said

“The outlook for the airline is positive, despite pressures on the broader industry, and we will be focused on securing the future of this strategically vital national carrier,” he added.

Affected travelers would be informed of the disruption and rebooked on flights as soon as operations resumed, the statement said.

Air Vanuatu operates four planes: one Boeing 737 and three turboprop planes.

Tourism makes up 40% of Vanuatu’s gross domestic product.

The Vanuatu Tourism Office apologized to travelers for the disruption.

“This is an evolving situation and we will continue to post updates,” the office said in a statement.

The office’s CEO, Adela Issachar, said the administration was in discussions with Virgin Australia and Fiji Airways, carriers that currently service Vanuatu, about flying stranded passengers.

“The updated schedule should be advised soon, so we’re all looking forward for that,” Issachar told Australian Broadcasting Corp.

Kelly said Air Vanuatu had been affected by labor shortages, rising operating costs, elevated interest rates and tropical cyclones in recent years.