Air Mauritius Warns of EU Passenger Decline

Posted 15/11/2011

Air Mauritius has warned that the current European debt crisis is impacting its business significantly saying that consumers are increasingly postponing or cancelling their spending on leisure activities, such as holidays in Mauritius.  Although the carrier reported a strong first quarter, its second quarter performance was weak as a €4.8 million profit in this period last year translated into a €6.3 million net loss, increasing first semester losses to €17.7 million, compared with € 6.8 million last year.  

The US debt episode, followed by the European debt crisis, hit the still recovering economies very hard and consumer confidence is at a low point, according to the airline.  This depressed environment primarily hurts the tourist industry and the airline has shifted its network capacity away from its traditional European cities into emerging markets.  This has helped boost passenger traffic, up 4.4 per cent to 336,391 passengers in the second quarter and 3.8 per cent to 608,750 passengers for the first half of the year, with loads of 78.6 per cent and 76.5 per cent being reported, respectively.

The European market remains key to the airline but it is concerned the economic downturn appears to have set in for the long term in the continent.  The airline acknowledges that the number of tourists travelling from Europe is “hardly growing” and even major markets such as Italy and the UK are down on last year.  “France, which is the largest market for Mauritius and Air Mauritius, “seems to be running out of steam,” according to the carrier. 

While the shift in growth over the last two years towards emerging markets such as India, China, South Africa and Australia is “reaping rewards” – they remain “small in relation to the European market,” it adds.  The airline is now reviewing its business model so as to cope not only with the recession in the airline industry, but also the downturn in the Mauritian tourism industry as a whole.

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