There’s a shakeout going on at Port Vila-based Air Vanuatu with the catchy tag of ‘New Era, New Look.’ The little airline that buzzes around the South Pacific is busy re-assessing its business strategy and returning the airline to the local people.
It’s not all sweetness and light, though. The incumbent CEO, Derek Nice, is not renewing his contract when it expires at the end of June. The Canadian airline executive has only been in Port Vila for two years.
In addition, Air Vanuatu is delaying the delivery of four A220s that were due to start arriving by the end of the year. The airline is attributing this to COVID-19 and the closure of international borders.
Air Vanuatu feeling the pinch from COVID-19
The state-owned airline has just four aircraft in its fleet, including a Boeing 737-800. The arrival of the four A220s over the next year would have seen the fleet double in size. Air Vanuatu was keen to grow and bolster tourism into the archipelago nation of 83 islands. But COVID-19 put the brakes on these immediate aspirations.
In March, Air Vanuatu suspended its international services to Australia and New Zealand. Just days later, domestic and inter-island services were reduced after a state of emergency was declared by the President of Vanuatu, His Excellency, Pastor Obed Talis Moses.
Since then, domestic and inter-island flights have largely resumed. The country’s isolation and lack of air links mean it is one of the few places on the planet to have no confirmed cases of COVID-19. That didn’t stop a general lockdown, and many of the country’s big businesses, such as Air Vanuatu, from been heavily impacted.
A strategic review underway at Air Vanuatu
Tourism is big business in Vanuatu and is now dead in the water. Air Vanuatu is taking the opportunity to look at its business strategy and make some changes in how it operates. It’s not just designed to conserve cash now, but it is also expected to have long-run benefits.
There will be the inevitable “review” of domestic and international routes and a look at where and how maintenance operations are run.
While the A220s have been delayed, the other key decision is to bring the airline back under local control. In a meeting with employees last week, Air Vanuatu Chairman Sam Firi said the airline would be simplified, the management team reduced, and expatriate managers mostly replaced with qualified local managers.
“We are returning Air Vanuatu to the people,” said Mr Firi.
“I am heartened by our government’s commitment to provide the financial support that will ensure Air Vanuatu can emerge from the current crisis. The board I lead today will continue to work closely with the management and staff, especially in these unprecedented times. We will get through this together, in the spirit of Vanuatu.”
Derek Nice to leave Air Vanuatu
A seasoned airline executive, Derek Nice, appeared to take this in his stride.
“It has been an honor to work with such a strong group of passionate and committed airline professionals,” he said in a statement seen by Simple Flying.
“I’ve made this decision in the best interests of the company, giving the new Board of Directors the freedom to implement the new directives mandated by the shareholders in the Vanuatu Government to make the changes they believe are needed to ensure our recovery.”
Joseph Laloyer, a former Air Vanuatu CEO and proud Vanuatuan, will temporarily step into the CEO’s role until a permanent CEO is found.