Mixed fates

June 1st 2024

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At press time, Oceania’s Air Vanuatu was hopeful of identifying investors to fund its return to flying. Read More » But elsewhere in the region, a start-up has shut down and a struggling flag carrier is undergoing restructuring after bids for equity in the airline fell short of expectations.

Since Air Vanuatu ceased flying on May 9 and the Pacific island nation appointed consultancy EY as liquidator to navigate it out of its financial mire, progress has been made. Bids for the airline have closed and the government is examining some of the tenders. “We have received interest from a range of parties seeking to resume Air Vanuatu operations, EY’s Morgan Kelly said in a recent statement. But firstly, 600 creditors must accept a haircut settlement for monies owed to them and the courts must approve the scheme of payment. If the Deed of Compromise is agreed by all parties, EY hopes the airline will exit liquidation on August 31. Qantas and Virgin Australia have been flying between the island nation’s capital, Port Vila, and Australia since the airline was grounded and AirLease Corp. repossessed the carrier’s only jet, a 737-800. A priority, the government said, is to resume its Twin Otters domestic schedule.

Earlier this year, and several thousand miles westward, Sri Lanka’s government hung out the for sale sign for 49% of SriLankan Airlines. But low bids for the holding prompted Colombo to reverse its decision to sell. Six expressions of interest in the shareholding were submitted to the government by the late June deadline, but “none was found to be suitable”, Sri Lanka’s minister for ports, shipping and aviation, Nimal Siripala de Silva, said. One bidder was AirAsia Consulting Sdn Bhd. Instead, de Silva said, the government will focus on restructuring the airline.

Restructuring was not an option for now shuttered Queensland-based start-up, Bonza, despite weeks-long efforts to find a buyer for the LCC. With cash flow often running dry and investors uninterested in supporting the domestic LCC with extra funds, the airline’s administrator had no choice but to close the carrier, making more than 400 staff redundant and without payment of their salary entitlements.