Vt400m sought to service Air Van loans, payments

The national flag carrier, Air Vanuatu urgently needs Vt400 Million to come out of its current financial difficulties.

Air Vanuatu needs the funds to pay off urgent outstanding loans owed by the airline to the leasing company in the USA for its 737-800 aircraft, a Bred Bank loan of 100 million, which it has been unable to pay, and the Airports Vanuatu Limited (AVL) in airport fees.

In tabling the Appropriation (Supplementary) Act No of 2010, Finance Minister told Parliament that Air Vanuatu was in a very difficult situation and urgently needed the funds to pay off its outstanding loans that include:

—VTt100 Million outstanding loan repayments with the Leasing Company in the USA

—Vt100 Million outstanding loan with the Bred Bank.

He revealed also that within the next seven days Bred Bank auditors will be auditing and the bank which means the unserviced loan could, not only place Air Vanuatu in an embarrassing situation, but also affect the bank.

Molisa said a further Vt200 Million is needed to meet Air Vanuatu’s outstanding payments to Airport Vanuatu Limited (AVL).

The minister said Air Vanuatu has problems and difficulties and needed to be addressed in order to keep the airline in operation, noting that the current management under CEO Joseph Laloyer and the directorship of government DGs, the airline has been making good progress but needs further assistance.

The airline is especially important to the country’s tourism industry.

In commending the government for seeking parliament’s approval for funds to rescue the national airline from its financial crisis, Opposition leader Maxime Carlot Korman said he needed answers to: the overall loan situation of the airline, and how long it will take for the airline to pay off its borrowing with Bred Bank.

Otherwise, he said the opposition would support the supplementary appropriation Bill.

In reply Finance Minister Molisa revealed Bred Bank were the only Bank that agreed to provide a loan to Air Vanuatu, as all other banks were reluctant to provide the loan sought by the airline.

Many questions and comments were raised by members from both sides of the house in relation to the management, and appointments of Air Vanuatu Boards and the operations of the company.

Molisa admitted he had not received regular reports from the airline, as he would have expected, confirming that there have been no auditing made from 2007 to 2009— a total of three years.

He assured parliament that the new CEO has assured him of improvements to the overall performances of the airline.

Parliament was told Air Vanuatu’s financial woes were not exclusive as all other airlines including Qantas were in the same boat.

Parliament was then adjourned and will continue with the Bill for the Appropriation (Supplementary) Act No of 2010 today.