Newcastle is one of five cities competing to start flying directly to Vanuatu.
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Air Vanuatu has secured finance for two new Airbus A220 aircraft and has received applications from Newcastle, Canberra, Adelaide, Christchurch and Wellington to start direct flights as soon as this year.
The airline will receive a second A220 in October, part of the nation's plan to double visitor numbers to 300,000 by 2030.
Newcastle Airport started a 13-week seasonal service to Auckland in the summer of 2018 and last year announced it would extend the New Zealand flights for another three years.
Vanuatu would be the airport's second international destination.
Airport chief executive Dr Peter Cock told the Newcastle Herald that a Vanuatu service could operate three times a week year-round carrying 108 passengers.
The airport would need approval from Defence and Australian Border Force before starting flights to the Pacific archipelago.
Vanuatu is made up of 80 islands and its capital, Port Vila, is a three-and-a-half-hour flight from Newcastle. The city already has direct flights to Auckland, Brisbane, Melbourne and Sydney.
Dr Cock said a Vanuatu service would "cement us as that second international gateway to NSW".
"It's a competitive process, but we're bidding on a year-round service," he said.
Vanuatu is a tax haven whose principal source of income is selling Europe-friendly passports for $150,000 to overseas residents, most of them from China, though most of these people never set foot in the country.
Meanwhile, Dr Cock said the coronavirus outbreak had not affected the airport yet and passenger numbers were up in February compared with the previous year.
"There still seem to be quite good passenger loads, but this is a fast-moving thing and that could easily change overnight," he said.
Dr Cock's comments came before the Australian government announced on Sunday that all arrivals would have to isolate themselves for two weeks, a move likely to cripple tourism.