Air Vanuatu (NF, Port Vila) is facing the prospect of losing its only jet. The state-owned carrier reportedly owes Air Lease Corporation VUV897 million vatu (USD7.5 million) and has three months to settle the debt or see the B737-800 repossessed.

Vanuatu's Daily Post newspaper cited unnamed sources on the weekend, saying the three-month deadline expires in December. ch-aviation has contacted Air Vanuatu and ALC to confirm the report but both parties were unavailable for comment before publication.

Last week, ch-aviation reported that Hevilift (PNG) (Mount Hagen) had taken back one of Air Vanuatu's three Twin Otters, with a second belonging to another owner now the subject of legal proceedings underway on the South Pacific island. According to the ch-aviation fleets module, Air Vanuatu's fleet comprises the sole leased B737-800, YJ-AV8 (msn 42052), one leased ATR72-600 (YJ-AV73 (msn 1358)), and two remaining DHC-6-300 Twin Otters.

According to its financial reports, the B737 lease with ALC expires in 2024 and the ATR72 lease with Nordic Aviation Capital runs out in 2028. In 2020, Air Vanuatu spent almost USD6.68 million on aircraft operating leases. The airline also has two A220-100s and one A220-300 still on order from Airbus despite having managed to drop one A220-300 commitment last year.

Air Vanuatu uses the B737 to service its international network, including operating flights to Nadi, Auckland International, Brisbane International, Sydney Kingsford Smith, and Melbourne Tullamarine. The airline has publicly responded to the reports it is encountering problems with its lessors. Vanuatu's minister of infrastructure and public utilities, Jay Ngwele, said the government has a standing commitment to the airline and will do everything financially necessary to support it. He said his public comments of support are "made in response to allegations made in the press concerning the alleged threat of aircraft repossession," he said. However, on August 31, the airline released a statement saying;

"While there is still a threat to the lease of the Boeing 737 that operates the international routes, the airline and the lessor have agreed to an interim plan that will include government reducing the significant arrears that have accumulated during COVID."

The minister says the airline will keep the B737 and that agreed payment plans with ALC are in place. He also suggests further aircraft may be on the agenda. Late last week, Vanuatu's prime minister met with stakeholders to discuss the lease issues.

"The public is assured that appropriate focus is on these matters and that this includes all the stakeholders in the airline including senior government officials," ends the Air Vanuatu statement.