Jetstar to Launch DirectFlights to Port Vila: A New Era for Vanuatu’s Tourism and Aviation

December 31, 2024 3:40 am | Posted in Features | Share now Twitter Facebook

On December 12, 2024, Jetstar, a subsidiary of Qantas Australia, will commence direct flights from Sydney to Port Vila, Vanuatu. Four flights a week are scheduled, bringing the total number of incoming international flights to Vanuatu to thirty (30), with a weekly seating capacity exceeding 5,500. This marks the culmination of a series of events that followed the liquidation of Air Vanuatu in May 2024.

The Liquidation of Air Vanuatu

On May 9, 2024, Ernst and Young (EY) were appointed as liquidators of Air Vanuatu Operations Limited (AVOL). This decision was made by the Vanuatu Government pursuant to a special resolution of the shareholder on May 2, 2024. The liquidation was the result of a number of challenges, as the airline had struggled financially for years. Even before the COVID-19 pandemic, it had faced fluctuating financial performance and operational difficulties. While the liquidation of the national airline may have surprised some, for those who had observed the airline’s struggles over the years, it came as no surprise— especially after the continuous political pressures it had endured.

AV3 and the Creditors’ Compromise Proposal

Following investigations into the airline’s operations, EY presented a report to creditors on August 11, 2024. In this report, the liquidators informed creditors of an offer for a creditor’s compromise proposal from AV3, a newly created entity by the Vanuatu Government through the Ministry of Foreign Affairs. The key points of the proposal were as follows:

The assets of AVOL, including the Air Operators Certificate and remaining aircraft, would be transferred to AV3.
the Vanuatu Government would inject USD 3.3 million into AV3.
The Vanuatu National Provident Fund (VNPF) debt of USD 9.3 million would be assumed by the Vanuatu Government.
The Vanuatu Government would write off its debt of USD 45.3 million.
BRED Bank’s debt would be retained, secured by a Vanuatu Government guarantee, and continue to be serviced by the company post-compromise.
Partially secured creditors and priority creditors would remain with the company after the compromise. • Employee entitlements would be paid 50% of amounts owing.
Unsecured creditors would receive approximately 5 cents on the dollar after the proposal’s implementation.

A vote was held at a meeting to consider the creditors’ compromise proposal, which passed with a majority in favor. On October 3, the Supreme Court of Vanuatu approved the implementation of the Deed of Compromise between Air Vanuatu and AV3, formalizing the terms of the creditor compromise. With that, the liquidation process was complete.

Regional Airlines Fill the Void in International Flights

When Air Vanuatu entered liquidation, all its international flights were immediately canceled. The Boeing 737, grounded in Australia, was repossessed by the aircraft leasing company and flown back to Canada. This left a significant gap in seating capacity, severely impacting tourism and the economy. In response, Virgin Australia announced it would increase its flight frequency to seven (7) flights per week. Other airlines quickly moved to fill the void, with Qantas applying for the rights to operate flights from Brisbane and Sydney. As of December 12, six international airlines will service incoming routes to Vanuatu, primarily to Port Vila, with a total of 30 scheduled weekly flights and a seat capacity exceeding 5,500.

Regional Airline Response

• Virgin Australia: In response to Air Vanuatu’s liquidation, Virgin Australia immediately increased its flights from Brisbane to seven per week. The airline later added extra flights on Tuesdays and Saturdays, bringing the total to nine per week.

• Qantas: On May 21, 2024, Qantas applied to the International Air Services Commission (IASC) for an allocation of 1,798 seats per week to operate passenger services on the Vanuatu route. Initially planned for August 2024, Qantas revised its plans and began operating three services per week from Brisbane to Port Vila in September 2024. This frequency is expected to increase to five services during peak demand periods in December and January.

• Fiji Airways: As a regional airline, Fiji Airways has always promoted Nadi International as a hub for connecting flights across the Pacific. It operates daily flights from Nadi to Port Vila using Boeing 737 aircraft, serving as an alternative connection for travelers flying from New Zealand or Australia.

• Solomon Airlines: Solomon Airlines, which had been involved in a code-sharing arrangement with Air Vanuatu, now offers six international flights to Vanuatu, including direct services from Auckland (three times a week), Honiara (twice a week), and a connection from Brisbane via Santo (on Thursdays).

• Air Niugini: Air Niugini operates a single weekly service from Port Moresby, which connects travelers to various destinations in Asia, including Hong Kong and Manila.

Jetstar’s Role in Vanuatu’s Future

On December 12, 2024, Jetstar will begin offering four direct flights per week from Sydney to Port Vila using an Airbus A321neo with a seating capacity of 220. This service will bring immediate benefits to importers, as it opens up a direct airfreight route previously handled via Nadi or Brisbane. The new Jetstar flights will allow for containerized airfreight services, significantly increasing the frequency and capacity for freight. This added competition is expected to positively impact freight rates.

The Future of AV3 and Vanuatu’s Aviation Industry

AV3 is now under the control of the Vanuatu Government, following the implementation of the creditors’ compromise proposal. While Ernst and Young (EY) have completed their role in the liquidation process, the future of domestic air services remains uncertain. The absence of the ATR aircraft, currently undergoing a C Check, has left domestic services unstable and erratic. The Vanuatu Government’s plans for AV3 remain unclear, though it seems unlikely that it will be able to offer a viable and competitive international service now that regional airlines have filled the gap left by Air Vanuatu.

Despite these challenges, the future for tourism in Vanuatu looks promising. As the saying goes, “under every cloud, there is a silver lining.” The liquidation of Air Vanuatu may, in hindsight, have been the best thing to happen for the country’s tourism industry.

Vanuatu Ferry 3: Celebrating a Decade of
Service with a Modern Milestone

Port Vila, November 8, 2024 – A new chapter begins for Vanuatu Ferry Limited as it celebrates ten years of dedicated service with the arrival of its latest vessel, the Vanuatu Ferry 3 (VF3). This Sunday, November 10, the VF3 will make its grand entry into Port Vila Bay at 7:00 am, signalling an exciting evolution in maritime transport for the nation.

The VF3 joins the fleet as a state-of-the-art Roll-On/Roll-Off (RoRo) ferry, replacing the inaugural Vanuatu Ferry I, which first sailed into Vanuatu’s waters in 2014. After years of dependable service, the VF1 now passes the torch to this modern successor, increasing the fleet’s capacity to over 4,000 tons of cargo and accommodating up to 1,800 passengers per journey.

Originally built in Japan in 2004, the VF3 underwent extensive refurbishment in Indonesia to ensure it meets the specific needs of Vanuatu’s communities. Equipped with modern features prioritizing safety and comfort, this vessel reinforces Vanuatu Ferry Limited’s commitment to connecting the islands and supporting economic growth through reliable transportation.

For a decade, Vanuatu Ferry Limited has played a pivotal role in the nation’s maritime network, ensuring goods, services, and passengers move seamlessly across the archipelago. With the VF3, the company renews its promise to deliver top-tier service while adapting to the growing demands of the population.

As they celebrate this milestone, the owners and staff of Vanuatu Ferry Limited express heartfelt gratitude to the people of Vanuatu for their trust and support. The VF3 stands as a symbol of progress, reflecting the company’s dedication to the prosperity and unity of the islands it proudly serves.

Welcome aboard the future of maritime transport in Vanuatu – the VF3 is here!