ROUTES AFRICA: Air Mauritius Returns to Profitability

Despite high oil prices and a significant depreciation of some major revenue earning currencies the revised business strategy adopted by Air Mauritius earlier this decade has enabled the carrier to return to profitability in the last financial year ending March 31, 2014. In its latest annual results the carrier posted a net profit of 7.3 million, while the wider Air Mauritius Group posted a 8.5 million profit. The airline’s profit came on a turnover of 459 million (up two per cent on the previous year) as more than 1.3 million passengers were carried during the 12 months.

These positive results marked the return to profit of the national airline over a full financial year after two consecutive loss making years. Air Mauritius has certainly benefitted from its ’Seven Step Plan’ transformation programme which was launched in February 2012. This project, which is on-going, has encompassed four 'Recovery Steps' and three 'Game Changers'. The former relates to network and fleet, commercial and revenue management, cash improvement and asset rationalisation and the latter aims to ensure long-term sustainability and involves re-fleeting and improving quality of service.

In this past year Air Mauritius has rationalised its network and now offers more choice and flexibility to its passengers by serving hubs while flying directly to 20 destinations in Europe, Asia, Africa, Australia and the South West Indian Ocean region. It has also reinforced gateways to Africa, Asia and Australia while concentrating its network around hubs in Paris, Kuala Lumpur, Johannesburg, Nairobi and Perth with enhanced agreements with airline partners. During the year additional frequencies were added on routes showing potential growth namely, in the Asian, Australian and African arena, while a direct service to Beijing was also introduced as from July 2013.

Thanks to this new approach in network configuration and despite fierce competition, Air Mauritius carried 2.6 per cent more passengers in 2013/2014 compared to the previous financial year, while maintaining an unchanged seat capacity offering. The figures for emerging markets show that Air Mauritius decision on its network concentration has been fruitful with 593,498 passengers travelling on the routes Mauritius/Asia and Mauritius/Africa, an increase of 23 per cent on the previous financial year.

“These positive results confirm the right choice of strategy to ensure return to profitability and long-term sustainability of Air Mauritius in a difficult economic and operational environment,” said Dass Thomas, chairman of the board, Air Mauritius, but he acknowledged that much still needs to be done to return to sustainable profits. “We are still faced with important challenges, namely the re-fleeting exercise and the growth of our activities,” he added.

The implementation of the Recovery Plan is certainly impacting positively on the performance of the airline. As per this Plan, it is expected that Air Mauritius will further improve its performance during the current 2014/2015 financial year and will make a decision soon on its fleet renewal programme with a targeted phased delivery starting from the 2017/2018 financial year.

Richard Maslen

Richard Maslen has travelled across the globe to report on developments in the aviation sector as airlines and airports have continued to evolve and…