Air Vanuatu halted all international flights and is close to going into insolvency.
The Pacific island’s government could put the state funded airline in bankruptcy proceedings.
It has been operating in a ‘challenging environment’
It comes as an aircraft lessor filed insolvency proceedings against the airline.
The airline’s board has been dissolved and accountants from Ernst & Young have arrived to explore its options.
All future international flights are currently grounded or under review.
The airline operated flights to Australia, New Zealand, Fiji, Papua New Guinea, New Caledonia and Solomon Islands.
A long-term lack of international flight service would significantly impact the tourism sector which generates one third of its GDP.
“The Vanuatu Government is now considering placing Air Vanuatu, the national carrier of Vanuatu, into voluntary administration,” the airline said
“We are conscious of the impact this situation has on travellers, ticket holders and the industry and on behalf of the Vanuatu tourism industry extend our apologies,” the Vanuatu tourism office said.
