Air Mauritius announces dismal full year results with a loss of 29.2 million Euros

AIR MAURITIUS LOSS DESCRIBED AS SHOCKING

News just received confirm that the annual results of the 2011/12 Financial Year for Air Mauritius are worse than excepted and a new round of cost cutting and route reduction, over and above the 8 destinations already axed earlier this year, is on the cards now. The loss of about 29.2 million Euros or about 37 million US Dollars has analysts now concerned how much time is left for the airline to turn its fortunes around before facing the stark choices of either being turned into a purely regional airline or else sold for scrap.
Information at hand indicates that from August this year onwards only London and Paris will be served in Europe with Frankfurt and Geneva falling to the wayside, as will Durban in South Africa too.
Word from the grapevine also has it that the planned once a week nonstop flight to Shanghai will not commence in view of the difficult operating conditions the airline has found itself in, which if true would contradict the intention expressed to increase services to the Indian Ocean rim countries from where more traffic is expected to be generated.
Board and management tried to put a brave face to the dismal figures, perhaps to pave the way to go to government for another bailout at taxpayers expense but opposition appears to be forming from sections of the private sector which with increasing frequency now demand decisive action to either find a financial partner to bail the airline out or else let go of it and have foreign carriers, mainly from the Gulf region, fill the gap with one stop flights to a much larger list of destinations than Air Mauritius could ever hope for in flying to.
What is clear that Air Mauritius, unless the cost cutting programme delivers the expected results and that does not account for a further weakening of the islands core European markets and continuously high fuel prices will not be able to continue in the shape and format the airline used to operate in the past and will face stark choices, to be made most likely not at the airline head offices but in the corridors of government, where board chairman and CEO will likely appear soon, hat in hand, to project hope and a return to better financial times while hoping to get another big cheque to keep them financially afloat.
Watch this space for regular and breaking news from the aviation sectors of Eastern Africa and the Indian Ocean islands.

The statement of the airline was made available and is being reproduced here:

Joint Statement from the Chairman of the Board and the Ag CEO
The results announced today are a reflection of the daunting challenges faced by the airline industry over the past year – European debt crisis and its impact worldwide, the high price of fuel, volatility of exchange rates Euro/Dollar and increased competition among destinations worldwide. All airlines have been affected and Air Mauritius is no exception.
Against this backdrop, it is gratifying to note that our company carried a record number of 1,324,613 passengers and generated a record operating revenue of Euros 450,9 million.
The company anticipated the challenges posed by the toxic combination of the above factors and took the initiative to review its business model at the start of the financial year while the Board and Management teamed up to address the short term performance. The business model review has yielded a seven-step plan which we have started to implement since mid February 2012. The implementation of the plan is our focus moving forward and all team members are standing together to ensure that we start seeing the results of the initiatives from the second half of the financial year.
Subject to no deterioration in external factors (European debt crisis, fuel prices and exchange rate Euro/Dollar), the companys transformation plan is expected to considerably reduce our losses this year. It is important that we remain vigilant especially after IATA, at its AGM this week in Beijing, raised the alert on the downside risks of the European Debt crisis and its potential dramatic consequences on the world economic growth hence on the airline industrys performance this year.
Kamal Taposeea Chairman
Andre Viljoen Ag CEO
12 June 2012

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