29 Mar 2016

Reduced flights crippling Vanuatu's fragile economy

3:36 pm on 29 March 2016

Businesses in Vanuatu say reduced flights into the country are having a crippling effect on the local economy.

Vanuatu's main international airport Bauerfield at Port Vila

Vanuatu's main international airport Bauerfield at Port Vila Photo: RNZI/Beverley Tse

They want a tax exemption until temporary runway repairs are completed at the country's main international airport in Port Vila.

In January, Air New Zealand, Qantas and Virgin Australia announced that they were suspending flights to the country over safety concerns about the runway at Bauerfield International Airport.

The new government of prime minister Charlot Salwai then scrambled to re-negotiate a World Bank loan for emergency repairs, which are not expected to be completed until at least April.

But dozens of businesses have signed a petition calling on the government to speed up the repairs to the runway and to allow Valued Added Tax exemptions up until May.

The Vanuatu Chamber of Commerce said businesses were on the verge of closing down with many staff already laid off or on reduced hours.

It said the suspension of services by major airlines was a severe blow to tourism in the country which is still struggling to recover from the devastation wrought by Cyclone Pam last year.