The chairman of the Air Vanuatu board, Harry Iauko, and his deputy, Paul Hillman, have been sacked from their positions.
The Minister of Infrastructure and Public Utilities, Maxime Carlot Korman, confirmed that he had terminated their positions as directors.
The Daily Post newspaper says Mr Korman told the president of the Vanu'aaku party, Edward Natapei, that he should find somebody else within the party to replace Mr Iauko.
But, Mr Natapei is refusing to accept the decision and says Mr Korman doesn't have the authority to oust Mr Iauko, as the board elected him, not the minister.
Mr Natapei says Mr Iauko, who is also the Vanuaaku party co-ordinator, remains the chairman of the Air Vanuatu board.
According to the Daily Post, Mr Korman was apparently frustrated that the board didn't meet his demands to remove Joseph Laloyer, a former marketing manager who was sacked earlier this year, but was reinstated following a court case.
But, Mr Iauko says this isn't true and they were acting on the request.