Air Mauritius Fights For Survival

Air Mauritius’ battle for survival is continuing; now, the airline is reportedly keen on attracting investment.

The possibility of taking a 49% stake in the struggling island nation carrier has been floated, with this deemed a large enough chunk of the airline to help it grow.

Bloomberg reported that the Government is at the helm of the sale for what would be a minority stake, and there are already interesting parties.

The most notable example is Doha-based Qatar Airways, which has been on a rapid expansion over the last eighteen months, acquiring stakes in airlines as it deepens its global network through strategic investments.

While unconfirmed, Qatar Airways’ interest was reported by people close to the matter and remains the favoured bidder should Air Mauritius formally proceed with putting the airline up for sale.

Qatar Airways has reported interest; however, it has not been well-received by everyone. The airline’s Chairman stated that while the business is clearly struggling, a sale to a global airline such as Qatar’s would “undermine economic sovereignty in the country,” as reported by Defi Media.

What’s Happened To Air Mauritius?

The requirement for Air Mauritius to sell a stake equating to 49% follows years of turmoil that are now reaching a breaking point.

Only in March was it reported that the airline was close to shutting down, with several fundamental changes needed to avert the company from a crisis and implosion.

At the time, it was revealed that the airline required approximately USD 344 million or 15.7 billion Mauritian Rupees in financing; that figure, however, only represented the amount as of March.

This poor financial position follows a lengthy period where finances and management have not panned out as intended. Current management is aware there’s a massive hill that must be climbed, but much restructuring is neccesary.

Increasing expenses have been partially to blame for the struggles. While a lack of focus on the rising expenses year over year, or an attempt to lower them to a level deemed manageable, compounded these woes and has put the airline into disarray.

Other challenges that have been highlighted include route decisions that backfired on the business, as evident in the airports selected. Upper management’s actions led to losses that continued to escalate to unsustainable levels.

In 2020, the carrier entered voluntary administration, a move aimed at repositioning it for the future. However, as executives currently at the carrier highlighted, critical decisions backfired from a human resource perspective.

With that being said, just because an airline enters voluntary administration does not mean it’s out of the woods. In fact, it can still, at times, lead an airline right back into financial turmoil if the problems run so deep or the business is not truly primed to exit restructuring.

For example, Spirit Airlines has just re-entered bankruptcy protection for the second time in as many years as it continues to fight for survival in a highly competitive industry.