- CAPA Analysis
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- Air Mauritius Centre,
President J Kennedy Street
- Main hub
- Mauritius Sir Seewoosagur Ramgoolam International Airport
- Business model
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- Air Austral
Hong Kong Airlines
South African Airways
Established in 1967, Air Mauritius is the national airline of Mauritius and is based at Sir Seewoosagur Ramgoolam International Airport in the capital Port Louis. Air Mauritius is the leading scheduled carrier operating in the Indian Ocean, serving 23 destinations in a network covering Asia, Africa, Europe and Australia. The carrier is majority-owned by Air Mauritius Holdings Ltd, which in turn is owned wholly-owned by the Mauritian government.
Location of Air Mauritius main hub (Mauritius Sir Seewoosagur Ramgoolam International Airport)
222 total articles
15 total articles
Air Austral is one the European Union's furthest flung airlines, although it ranks as the second largest airline in the Indian Ocean by seat capacity. Based in the French territory of La Réunion, it shares with many European airlines a recent history of loss-making and restructuring.
Under CEO Marie-Joseph Malé, a former Air France executive, Air Austral's restructuring programme is now making an impact. The past two years have seen an improvement in the company's indebtedness and now a return to profitability in FY2014. This followed substantial losses prompted by economic weakness in Europe hitting leisure demand for the Indian Ocean French territory and an over-ambitious expansion programme.
The turnaround represents a significant achievement, but Mr Malé will no doubt be anxious to ensure that he builds on this and that Air Austral can be sustainably profitable. His agenda includes expanding the airline's partnerships, making further cost reductions and finally resolving the problem of what to do about Air Austral's order for two all economy class A380s.
Air Mauritius is well on the road to recovery, a year into a five-year plan that aims to implement a new business model that restructures its operations to become less dependent on traditional, but flagging, European markets and instead turn the airline’s focus to the growth markets around the Indian Ocean Rim and Asia.
A seven step recovery plan launched in Feb-2012 as profits crumbled into losses saw Air Mauritius undertake a major network consolidation which involved withdrawing its services to Germany, Italy and Switzerland as well as service reductions to China, Australia and Africa. But, with its network brought back into balance, and profitability restored, Air Mauritius has resumed a growth path with plans to launch a direct service to Beijing and reinstating some suspended routes and capacity in key markets.
Hardest hit from the European economic situation, aside from the carriers that have collapsed, are far away from continental Europe in the Indian Ocean, which contains the self-proclaimed Vanilla Islands grouping of countries: La Reunion, Madagascar, Mauritius and Seychelles. These nations' carriers are largely dependent on European leisure traffic, which has evaporated in the dual threat of weakening economies and high fuel prices that provide no stimulation to whatever demand is left.
The starkness of the situation has been demonstrated most recently by Air Austral, which over the northern winter will reduce its long-haul network to a single destination and will postpone – or possibly cancel – its order for two Airbus A380s, following it being unable to pay for a new Boeing 777 awaiting delivery. Air Austral is also looking to partner with Air Mauritius to maintain a connection to Australia, a further sign that the situation in Europe is forcing the Vanilla Island carriers to make medium/long-term strategy changes that will finally strengthen them. Etihad Airways earlier this year acquired a stake in Air Seychelles and is now lending management oversight to the Seychelles flag carrier while the region's other carriers have conducted overdue network reviews.
Air Mauritius joins fellow Vanilla Islands carriers that are restructuring their operations largely as a result of decreased demand from mainstay European markets undergoing economic turmoil. The Vanilla Islands – comprising La Reunion, Madagascar, Mauritius and the Seychelles – have already seen restructures from Air Austral in La Reunion, Air Madagascar and Air Seychelles. Air Mauritius’ plan, the last outstanding expected restructure, will see its European presence consolidated while efforts are renewed to expand to the potentially stronger but still nascent Asian market.
Under what has been dubbed a “restructuring effort”, Air Seychelles has cut 77% of its total seat capacity. Between Nov-2011 and Mar-2012, the airline will cut all routes except for its domestic services, which includes one scheduled service to Praslin Island and a handful of chartered services operated on behalf of hotels, and its twice weekly service to Mauritius. The carrier in Oct-2011 had a restructuring plan, CEO changes and corporate re-branding, which were intended to result in a renewed focus on high-end tourism, as CAPA wrote at the time. Just two months later, the carrier announced deep capacity cuts, suggesting more drastic measures were needed.
Fellow Vanilla Islands Group (an affiliation of the island nations Seychelles, Madagascar, La Reunion, Mauritius and Comoros that are supposed to work together to promote tourism and investment) carrier Air Austral, based in La Reunion, will also make capacity cuts to its long-haul network although it is looking to Asia Pacific and remains intent on keeping its European services operating. Meanwhile, Air Mauritius recently reported an unexpected net loss in its 2QFY2011 results, Air Madagascar can only operate to the European Union through a charter agreement with EuroAtlantic Airways due to its presence on the EU Airspace blacklist, and Comores Aviation only operates a handful of destinations around the Vanilla Islands Group and Eastern Africa. Overall, future prospects for the group look bleak unless collaboration efforts are taken more seriously.
Air Mauritius’ largest markets were hit hard by the European debt crisis, resulting in a loss in its usually profitable second quarter. The airline reported a net loss in 2QFY2012 of EUR6.3 million, compared to a nearly EUR5 million profit in the same period last year. The European debt crisis that hit Mauritius’ largest markets contributed to the loss and has set the carrier up for future challenges. While Mauritius reported a small increase in tourism arrivals for Oct-2011, thanks to a new air link with China that increased Chinese tourism arrivals by 161%, tourism overall is expected to fall, placing further pressure on the carrier.