Vanuatu risks billions as Airbus confirms forfeiture clause
May 8, 2025 10:06 pm | Posted in Business News | Share now TwitterFacebook
By Doddy Morris.
Airbus has confirmed that failure to complete an aircraft purchase agreement typically results in the loss of pre-delivery payments, adding new concern to ongoing questions surrounding Vanuatu’s controversial aircraft deal worth over VT2 billion.
In response to questions from the Daily Post, an Airbus spokesperson declined to comment on the specifics of the Vanuatu Government’s arrangement, citing company policy. However, the spokesperson noted: “Any contractual default or failure to take delivery of an aircraft causes major costs and damages for the aircraft manufacturer. In such cases, it is standard industry practice for pre-delivery payments to be forfeited.”
The comment comes amid growing public scrutiny and political pressure over what is alleged to be a large deposit paid by the Vanuatu Government in 2019 for aircraft that were never delivered due to interference.
On 26 February 2019, Airbus announced that Air Vanuatu had selected the Airbus A220 for a major fleet expansion. Air Vanuatu, the national flag carrier, had signed a firm order for four A220s (two A220-100s and two A220-300s). It was the airline’s first-ever order with Airbus, making it the launch customer for the A220 in the Pacific.
Former Air Vanuatu Chief Executive Officer Derek Nice said at the time that by ordering the A220, Air Vanuatu was making an investment in advanced technology and passenger comfort, while showing its commitment to fuel efficiency and environmental goals.
Aviation industry experts note that such large deposits—commonly known as Pre-Delivery Payments or PDPs—are often required by manufacturers to secure production slots and begin the custom build. These payments can amount to as much as 30 percent of the total aircraft price and are usually non-refundable unless specific clauses are included in the contract.
If Vanuatu did make a multi-million- or billion-vatu deposit and failed to follow through with the transaction, the financial loss could rank among the largest in the country’s history.
Despite this, the Government of Vanuatu has recently reaffirmed that the VT2 billion deposit remains safe and that talks are continuing regarding the aircraft purchase.
