Dhaka: The flag carrier Air Mauritius announced that it has entered into voluntary administration, following “a complete erosion of the Company’s revenue base” as a result of the ongoing coronavirus pandemic.
The airline had already begun a transformation programme earlier this year to address “financial difficulties”, but global travel restrictions and plummeting demand caused by COVID-19 have exacerbated the issues faced by the carrier.
It is understood the airline will continue to fly during the voluntary administration period, although according to its website all international flights are suspended until May 15.
Air Mauritius is the second airline to go into administration this week – Australia’s second largest carrier Virgin Australia suffered the same fate on April 21.
In a statement, Air Mauritius said, “The Board of Directors of Air Mauritius Limited met on April 22 to take cognisance of the latest financial status of the Company in light of the recent developments worldwide relating to the COVID-19 crisis."
“It was noted that, in January 2020, the Board had set up a Transformation Steering Committee with a view to addressing the financial difficulties of the Company and to reviewing its business model for ensuring a sustainable future. Wide consultations were held with all concerned stakeholders and substantial progress was made in formulating the Action Plan to be recommended to the Board," the statement added.
“Unfortunately, travel restrictions and the closure of borders in all our markets and cessation of all international and domestic flights in an unprecedented crisis, has led to a complete erosion of the Company’s revenue base."
“Furthermore, there is uncertainty as to when international air traffic will resume and all indications tend to show that normal activities will not pick up until late 2020."
“In these circumstances, it is expected that the Company will not be able to meet its financial obligations in the foreseeable future. The Board, therefore, took the decision to place the Company under voluntary administration in order to safeguard the interest of the Company and that of all its stakeholders.”
The flag carrier's majority is owned by the Mauritian government, and according to its website operates flights to 22 destinations across four continents. It has a fleet of 13 aircraft, including the A330 neo and A350-900.