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Collapsed airline Air Vanuatu owes creditors $110 million and that number is expected to rise, the company's liquidators say.
In a statutory report to creditors released this afternoon, liquidators from Enrst and Young have said the carrier's "financial position is dire".
Air Vanuatu has an overall deficit of $US65.9 million ($98.6 million) and owes creditors $US73.5 million ($110 million), according to the report, which says the actual amount owing is likely to be far higher.
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"The company's available financial information is significantly out of date," liquidators wrote.
"Therefore, this statement represents the liquidators' best estimates only, based on the company's books and records, and the information available.
"As our investigations continue, it is almost certain this estimate will change.
"In particular, it is likely the value of liabilities will increase materially."
The liquidators are exploring options – including a sale of the business – to keep Air Vanuatu running but said, were it not for the financial support of the Vanuatu government, the airline would collapse for good.
"The liquidators are grateful for the government's statement of financial support which is required to stabilise the operations of the company.
"If not for this financial support, the liquidators have no other choice than to cease operations and wind down the company.
"The company's financial position is dire and it clearly cannot fund its own operations."
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According to the report, only two of Air Vanuatu's six aircraft are currently flight-ready, with three requiring maintenance and one repossessed by its owner.
Liquidators said plane part shortages were one of the reasons behind the airline's financial troubles.
"(Air Vanuatu) encountered several operational challenges in recent years … such as travel restrictions associated with the COVID-19 pandemic, natural disasters such as the double cyclone event in 2023, and disruptions to the availability of its fleet, due to global aviation parts shortages," the report states.
"As a consequence, we understand the business has been underperforming for a significant period of time."
The airline unexpectedly cancelled its international flights last week, including those to Sydney and Brisbane, before being put into voluntary liquidation the day after.
