Sydney, Australia

Air Vanuatu, the national carrier of the Pacific Island nation of Vanuatu, entered voluntary liquidation, with authorities unable to confirm when the flights will resume amid Australian travellers and ni-Vanuatu people stranded across the two countries. 

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Representatives from accounting firm EY arrived in Port Vila on Thursday to conduct initial assessments of the airline's financials. After which, the decision of voluntary liquidation was made by the government of the Pacific island. 

All of Air Vanuatu's international flights between Thursday and Sunday (May 12) are cancelled. The airline said in a statement that all later flights are under review. 

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Air Vanuatu is one of the few airlines servicing the South Pacific archipelago with international flights. The scrapping of  international flights by the state-owned airlines on Thursday could jeopardise foreign tourism earnings. 

Air Vanuatu operates only four aircraft between the country's islands and to Australia, New Zealand and other South Pacific islands. 

"Air Vanuatu with the rest of the global aviation industry has been impacted by labour shortages, rising operating costs, the rising cost of credit and Vanuatu has also been specifically impacted by some weather issues over the last few years, particularly cyclones," EY Strategy and transactions partner, Morgan Kelly was quoted as saying by Reuters.

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"We have taken control of the business today and we are focused on resuming normal trading operations as soon as possible. This morning our team commenced the process of communicating with travellers who have been impacted by this disruption," Kelly added. 

On Wednesday (May 8), several flights were cancelled because of extended maintenance requirements for aircraft, the airline said. 

Kelly also informed that the existing management team is still in place and they are working closely with the team to resume normal domestic operations and international operations as soon as possible. 

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While shedding light on the future of the airlines, Kelly said that they had been speaking to other airlines. 

"We haven't started any conversations, we haven't started a sale process for example, we were only appointed this morning so we are just trying to find out what we're dealing with and what the financial status is of the airline and trying to resume operations temporarily, then we'll start that process," Kelly said. 

(with inputs from agencies)