The management of Air Vanuatu International has told staff there'll be layoffs because of the financial difficulties it's facing.
Our correspondent says management is understood to have called for staff willing to take voluntary redundancy.
The Minister of Public Utilities, Serge Vohor, had already signalled the financial strife, saying earlier that the airline will not renew the contracts of expatriates holding managerial positions.
They are to be replaced by ni-Vanuatu on lower salaries.
Last month the airline cancelled its direct flights from Santo to Australia, citing the cost, but the Government stepped in with more funding after businesses in Luganville threatened to protest.