Vanuatu prime minister flags major aviation sector reform

By Andrew Curran.

Vanuatu’s Prime Minister, Jotham Napat, has acknowledged that the country’s aviation sector, including state-owned carrier Air Vanuatu, requires significant reform.

“Our domestic aviation sector cannot continue as it is,” Napat told local media after the New Zealand High Commissioner presented the Vanuatu Domestic Aviation Technical Assistance Report on 23 April in Port Vila.

The New Zealand Government-funded review, undertaken by Eagle Aviation Consulting at the request of the Vanuatu Government, found the sector to be fragmented, and lacking both a shared strategy and clear national objectives.

“There is no business plan, no usable cost data, and an over-reliance on costly operations,” Napat said. “That is not sustainable.”

No business plan to turn Air Vanuatu around

Air Vanuatu was liquidated in May 2024 following years of debt, mismanagement and operational instability. At the time, its sole jet, a Boeing 737-800, had been recently seized by lessor Air Lease Corporation while undergoing maintenance in Melbourne because of lease payment defaults.

The airline’s turboprop fleet, three DHC-6-300 Twin Otters and one ATR72-600, continued to operate domestically but had developed a reputation for unreliability, due to frequent technical issues and cancellations.

The airline was sold to a newly established government-owned entity under the Ministry of Foreign Affairs. Domestic operations have resumed, but without larger aircraft, international services remain in hiatus.

A fourth Twin Otter joined the fleet in January, while a fifth aircraft expected in March/April 2026 has yet to be delivered. The ATR72-600 has only recently returned to service following an extended grounding for engine repairs.

The four Twin Otters have an average age of 48.5 years, with two currently out of service. This includes the recently delivered DHC-6-300, YJ-AV15 (msn 481), which is more than 50 years old and currently parked at Port Vila Airport (VLI).

The airline is now seeking a new chief executive.

“The days of ad hoc decisions are over,” Napat said. “With discipline and the right investment, we can build an airline that serves our people and supports our economy.”

Grounds for optimism at Air Vanuatu

Simon Russell, chief executive of Eagle Aviation Consulting, said there were grounds for optimism.

“A clear pathway exists to restore reliable connectivity, achieve profitability, and drive economic growth,” he said, noting that developing a five-year business plan was a priority.

The report also calls for stronger leadership, improved management systems and better long-term planning.

Air Vanuatu’s acting chief executive, Joseph Laloyer, is regarded as capable and astute at navigating Port Vila’s clannish political scene. However, despite several stints leading the airline, he has not achieved a turnaround.

New PM wants to reform Air Vanuatu

Napat, elected in early 2025 after the airline’s collapse, has made reform a priority. He is seeking a CEO that can rebuild confidence, strengthen the balance sheet, and position the carrier for long-term success.

The report has not yet been publicly released but the government has committed to implementing its recommendations. However, previous reviews have made similar proposals, but with limited follow-through.

“We requested this technical assistance from New Zealand because government must make decisions based on facts, not guesswork,” Napat said.

The Vanuatu Government has also requested further assistance from New Zealand to help implement of the report’s recommendations.

Photo: AI-Generated.

Contact the writer: andrew@aerosouthpacific.com