Air Calédonie mulls receivership as blockades continue

By Andrew Curran.

Air Calédonie has around two weeks’ worth of cash on hand and is losing XPF10 million (USD96,000) per day after protestors began blockading airports in early March, forcing the majority state-owned carrier to suspend its domestic flights.

"We have little room for manoeuvre,” Air Calédonie board member Samuel Hnepeune told the la1ere outlet. “If the airfields remain blocked, our cash flow risks being completely depleted. How do we pay the bills? How do we pay the salaries?”

Earlier this week, the airline furloughed around half its 220 employees in a bid to preserve cash.

“Partial unemployment schemes have been implemented, with a view to scaling back operations,” said Hnepeune. “Those who work at the airports are currently without any work."

Air Calédonie’s three ATR72-600s normally operate scheduled services from Nouméa's Magenta Airport (GEA) to Ile de Pins (ILP), Mare (MEE), Lifou Island (LIF), and Ouvéa Island (UVE).

But protestors began blockading Ile de Pins, Mare, Lifou, and Ouvéa airports on March 2 – the day Air Calédonie was meant to move its Nouméa operations to La Tontouta Airport (NOU).

Protests against an unpopular airport move

The government ordered move has proved unpopular with some islanders and their traditional leaders. They like Magenta Airport because it is far closer to Nouméa’s downtown. The protestors say shifting flight operations to La Tontouta will make it harder for them to access healthcare and other services in Nouméa.

In response, the New Caledonia Government has offered to run a ticketed shuttle bus service between Nouméa and La Tontouta Airport, about 40 kilometres north.

That offer has also proved unsatisfactory to the protestors and Air Calédonie has become a pawn in a stand-off between the protestors and the government.

“We've been talking about it for a while – the possibility of placing Air Calédonie into receivership,” said Hnepeune. ”The departments are currently in discussions with legal counsel and the auditor to actually move to this stage.”

This is not the first time protestors have blockaded New Caledonia’s airports and not the first time Air Calédonie has had to resort to a formal business restructuring process.

In October 2023, the airline applied to a Nouméa court to be placed under an ad hoc mandate procedure, whereby a court-appointed third party negotiates with creditors to restructure debts or secure financing.

Like now, that followed local protest groups blockading airports for 32 days over a two-month period. The protestors were objecting to air fare increases.

The airline estimated it lost XFP180 million (USD1.73 million) over the period.

Similarly to now, the airline warned that continuing protests threatened its very survival.

Another instalment in Air Calédonie's ongoing battle for survival

Air Calédonie hasn’t had a solid financial footing since the start of the pandemic. New Caledonia’s economy is heavily tourism dependent, and Covid-19 hit it hard.

Less that 12 months after applying for the ad hoc mandate procedure in 2023, ongoing civil unrest around Nouméa again plunged the airline into crisis, with the bad publicity again keeping the tourists away.

This week, protest leaders have told French language outlets that they are standing firm but would stand down if the New Caledonia Government accepted that Air Calédonie needs to stay at Magenta.

But the New Caledonia Government insists the move must go ahead. At the time of publication, Air Calédonie’s domestic flights have been suspended for 19 days.

The airline’s international flight to Port Vila (VLI) and some internal flights around that country continue to operate. 

Photo: AI-Generated.

Contact the writer: andrew@aerosouthpacific.com