Air Mauritius (MK, Mauritius) is continuing its suspension of scheduled international passenger flights until the end of June, and has now announced potential new staff cuts and further losses.
In April, Air Mauritius announced it was entering voluntary administration after determining it would not be able to meet its foreseeable financial obligations. It appointed Sattar Hajee Abdoula and Arvindsingh Gokhool of Grant Thornton as administrators with effect from April 22.
“Amidst the COVID-19 crisis, the Mauritian national carrier wishes to give itself the necessary breathing space and set the conducive conditions for restructuring opportunities in order to stay afloat,” the administrators said. “At the outset, it is important to highlight that Air Mauritius has not filed for bankruptcy. Our objectives as administrators are to safeguard the interests of the company and more importantly, re-engineer its activities so that it can take off again once this crisis is over”, said Abdoula.
Bloomberg has since reported that the administrators are running out of time to save the airline as cumulative losses are due to reach MUR9.5 billion rupees (USD237 million) by the end of March 2021; there is little progress with proposed job cuts, and the cost of leasing aircraft increases.
A document seen by the news agency states that if costs are not cut in the short term, Air Mauritius will require a cash injection of MUR10.3 billion (USD260 million) to meet its financial commitments. It is spending MUR350 million (USD8 million) a month on wages and MUR250 million (USD6 million) on leases, Abdoula told Radio Plus.
Abdoula told the Port Louis-based broadcaster that up to 50% of Air Mauritius’s 3,000 staff could lose their jobs. The administrators have asked employees with more than 33 years of service, around 135 personnel, to opt for retirement from the end of July.
Abdoula said the two A350-900s leased from AerCap may be recovered from South African Airways (SA, Johannesburg O.R. Tambo) if it cannot pay for their sub-lease. He added that Air Mauritius is using older A340-300 aircraft but these are owned by the airline, avoiding the threat of repossession, according to an emailed statement seen by Bloomberg.
According to the ch-aviation fleets advanced module, Air Mauritius leases two A350-900s from AerCap, two A330-900s from Air Lease Corporation, one A330-200 from Doric Asset Finance, and two ATR72-500s from Nordic Aviation Capital. It owns two A319-100s and a single ATR72-500.
