Vanuatu Hitting up Airbus for Forfeited Pre-Delivery Payments - Again

Vanuatu's Deputy Prime Minister and Minister of Finance and Economic Management, Johnny Koanapo, will fly to France next month to try to extract forfeited pre-delivery payments from Airbus stemming from a cancelled A220 order.

Per the Vanuatu Daily Post, the Vanuatu Government made predelivery payments of USD20 million for four A220s (two A220-100s and two larger A220-300s) ordered in 2019. However, the order was cancelled in 2022 after a change of government and an official inquiry found the aircraft type was not fit for its intended purpose.

"We are looking at alternative options," an Air Vanuatu spokesperson said at the time. Since then, the airline and successive governments have maintained that Airbus owes them a refund of the predelivery payments. Koanapo, who was elected in 2016 and should know better, continues the theme.

AeroSouthPacific is aware that Airbus has no intention of refunding the money. The manufacturer says as with every aircraft purchase agreement, regular non-refundable pre-delivery payments are made between the date when an order is placed and until the final transfer of title, at which point around 80% of the purchase price is paid.

In the event of default on pre-delivery payments with no resolution, the manufacturer may proceed to remarket the production slots. Per the contractual terms, any pre-delivery payments that have been received before the default are non-refundable.

Port Vila's revolving administrations say Airbus is effectively holding the money in trust until Air Vanuatu gets its act together.

Airbus says it is always happy to talk to Air Vanuatu and the government, but it does not owe them anything, be it cash or credits for future aircraft orders.

The foregone money and forlorn hopes it would find its way back to the airline was one reason behind Air Vanuatu's liquidation in 2024. The airline now operates as a barebones domestic operator after a lessor seized its sole jet aircraft last year while undergoing maintenance in Melbourne.

Koanapo is due to fly out in May.

Photo: Airbus