Vanuatu Strikes Deal With Airbus Over Cancelled A220 Order

Vanuatu’s government says it has reached an agreement with Airbus to preserve predelivery payments for future aircraft orders. The outcome followed Prime Minister Jotham Napat and Deputy Prime Minister Johnny Koanapo travelling to France to discuss the matter.

“The issue in terms of Airbus has been very positive,” Napat told Vanuatu’s Daily Post newspaper. “We thank the Deputy PM who met with the Vice President of Airbus and managed to resolve the matter. Because of commercial conditions, we were at risk, but we did not lose anything.”

In 2019, the Vanuatu Government ordered four A220s (two A220-100s and two larger A220-300s) on behalf of Air Vanuatu. The following year, it paid around USD20 million in predelivery payments for the aircraft. Pre-delivery payments are a normal part of the aircraft order process.

However, the A220 order was cancelled in 2022 after a change of government. An official inquiry found the aircraft type was not fit for its intended purpose. In such cases, the predelivery payments are forfeited. Airbus has consistently said it was happy to talk to Vanuatu’s Government but was unlikely to hand the money back.

Vanuatu has cycled through several governments in recent years, further complicating negotiations. Earlier this year, the present government threatened to sue Airbus if it did not return the money. Shortly after, the government announced that Koanapo would fly to France to meet with Airbus officials.

While in France last week, Napat also met with French President Emmanuel Macron to discuss bilateral cooperation, investment opportunities, and regional issues. Napat told local outlets that further details concerning the Airbus breakthrough would be released shortly.

Vanuatu’s successful efforts to salvage the predelivery payments will go some way towards paying for future aircraft. The A220s would have allowed Air Vanuatu to significantly expand its services around the Southwest Pacific. Instead, the government liquidated the airline in 2024 and is now staggering along, operating a handful of domestic routes.

The lessor of Air Vanuatu’s sole jet, a B737-800, repossessed it in early 2024 after ongoing payment defaults. Without the jet, Air Vanuatu could not maintain its international network. The airline’s fleet now comprises a single ATR72-600 and two Twin Otter DHC-6-300s. These regularly go out-of-service because of maintenance issues and shortages of parts.

The Vanuatu Government hopes the Airbus agreement takes it closer to procuring jet aircraft again and resuming international flights. However, none of the parties said when this might happen.