The Vanuatu government wants Air Vanuatu (NF, Port Vila) to stop relying on state financial assistance as it restructures the carrier, deputy prime minister and finance minister Johnny Koanapo told parliament on November 9, 2026, according to the Vanuatu Daily Post newspaper.
As part of the restructuring, the government has set up a separate company to own aircraft and other aviation assets. Koanapo said the government had allocated VUV25 million vatu (USD207,000) to the arrangement and valued the company's assets at VUV1.2 billion (USD9.9 million) or more.
The new company, Vanuatu Aircraft Leasing Company Limited, recently acquired two DHC-6-300s, YJ-AV15 (msn 481) and YJ-AV16 (msn 472), which it intends to dry lease to Air Vanuatu. However, the lease agreements have yet to be signed because government lawyers are still finalising the arrangements.
The government expects Air Vanuatu to pay lease fees and eventually return dividends to the state. But Koanapo acknowledged that the airline remained unprofitable and said the government did not expect the full financial benefits to materialise in 2027.
The minister said any future financial assistance would come with specific conditions and accountability requirements. The government has also indicated that it will continue to guarantee fleet expansion and cover certain costs linked to the airline's planned Billing and Settlement Plan (BSP) arrangements.
A government-commissioned aviation review released in April 2026, which ch-aviation reported on at the time, identified shortcomings in Air Vanuatu's management systems, route cost data, and business planning. The government has also committed to repaying the airline's outstanding VUV871 million (USD7.2 million) debt to the Vanuatu National Provident Fund by December 2027.
