Pacific Country’s Tourism Feels a Pinch as Air Vanuatu’s Future Hangs in the Balance

Air Vanuatu’s liquidators have said that the services will resume after the safety and maintenance checks

Air Vanuatu is Vanuata’s national flag carrier, operating to Australia, New Zealand, New Caledonia and points of the South Pacific. The frequent cancellations and delays had become a part of the national carrier of the Pacific Island nation of Vanuatu, Air Vanuatu, from the past two months which has given more reasons to the Government to take actions. 

The Government made an announcement that Air Vanuatu is in voluntary liquidation. Air Vanuatu’s liquidators have said that the services will resume after the safety and maintenance checks amid Australian travelers and ni-Vanuata people stranded across the two countries.

Hotels and business owners feel the pinch and fear that tourism will bear the brunt of the airline’s grounding. 48% of the country’s GDP (Gross Domestic Product) is derived from Tourism. With the national carrier, Air Vanuatu flights being temporarily discontinued.  

According to a statement from the Vanuatu Hotels and Resorts Association (VHRA), “the livelihoods of thousands of ni-vanuatu and their dependents employed in Vanuatu hotels and resorts are now at risk.” Vanuatu’s reputation has suffered significant harm in international travel markets. Travelers who are considering alternative destinations are shifting their travel plans, and wholesalers are following them.

The state owned airlines disconnected their international flights which jeopardised the tourism income. Connecting the South Pacific archipelago with international flights, Air Vanuatu is one of the very few airlines with such services.  

The island country, Vanuatu is known for its tourism with 83 islands. It attracts tourists by its volcanic landscapes, pristine beaches, rich marine life, stunning natural beauty and rich cultural experience. Before the pandemic, the country welcomed and was home to 90,000 tourists each year. A majority of tourists flew from Australia and New Zealand, and while Virgin Australia also flew to and from the archipelago, Air Vanuatu carried the majority of the country’s air travellers.

Vanuatu was in the middle of a post-pandemic recovery and experienced a tourism boom, but that didn’t last long with Air Vanuatu’s ongoing turbulent operations. This has led to people crossing this destination off their list, said Joel Slattery, owner of The Moso hotel located on the Moso Island. 

The EY Strategy and Transactions partner, Morgan Kelly said that the national airlines, Air Vanuatu along with the rest of the global aviation industry has been impacted by labor shortages, rising operating costs, and rising cost of credit. Vanuatu has been majorly impacted by weather issues over the last few years, particularly cyclones. 

Vanuatu’s only jet, Boeing 737 was grounded in Brisbane in April 2023. More than 25 flights were cancelled over a weekend due to an ongoing engineering requirement in September 2023. In January this year it was again forced to stay on the tarmac for scheduled maintenance as their required parts had still not arrived. Boeing was warned last year about the supply chain issue which is a common problem across all aviation industries. It has been hard to procure since the pandemic and the Ukraine war.  

35% of employment depends on tourism. The news of liquidation has already impacted hotel reservations and employees, said Stella Namola, the office manager of Hideaway Island Resort and Marine Sanctuary which is located on the island of Eftate. He claims that they have had to cut down work for their staff.

In the meantime, There will be some short-term pain that the country will have to deal with while the industry is going to face a few quiet weeks due to low tourism. Rob Macalister, the President of the Vanuatu Tourism Operators Association and the Managing Director of Vanuatu Ecotours said, “But in the long term we’re going to come out as a stronger destination as we need to address these issues around our national airlines. This is the start of the process.”