Vanuatu PM Threatens to Sue Airbus

Vanuatu Prime Minister Jotham Napat says his government will sue Airbus if it does not return pre-delivery deposits for a cancelled aircraft order.

As previously reported in AeroSouthPacific, the Vanuatu Government paid USD20 million in predelivery payments for four A220s (two A220-100s and two larger A220-300s) ordered in 2019. The aircraft would have operated for Air Vanuatu.

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. Generally, in such cases, the predelivery payments are forfeited per the terms of the initial order contract.

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 order date and 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.

Various governments have come and gone since the order and cancellation, but a common theme from all the administrations is that Airbus owes the government a refund.

In May, Vanuatu's Deputy Prime Minister and Minister of Finance and Economic Management, Johnny Koanapo, flew to France to talk to Airbus about the matter and seek a resolution.

Speaking at a press conference in Port Vila last week, Napat said negotiation is the preferred option. "This is our government's first approach before considering legal alternatives," he said.

"(But) If Airbus informs us that they are unable to repay the funds allocated for the aircraft, the next step for the government will be to take the matter to court. We will seek legal advice on whether the agreement signed with Airbus can be revisited."

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.

Photo: Air Vanuatu