Code MD-258
Madagascar Airlines, previously known as Air Madagascar, has announced the restoration of its approval by the International Air Transport Association (IATA). This approval enables the airline to once again distribute its tickets through travel agencies and tour operators. Thierry de Bailleul, CEO of the airline, made this announcement on Thursday, March 21, 2024.
This development follows Madagascar Airlines’ return to the Billing and Settlement Plan (BSP) and the IATA Clearing House, as announced by the airline executive on May 10, 2023. The airline had been excluded from these platforms in 2018 and 2016, respectively, due to financial and image challenges.
The BSP, a key component of IATA, serves as an intermediary for ticket transactions between airlines and travel agencies. The absence of this platform has hindered Madagascar Airlines’ visibility and accessibility in the global market. To facilitate its reinstatement, IATA required a $5 million bond in 2022.
Thierry de Bailleul noted, “Now, with our reintegration, flights to destinations like Antananarivo or Nosy Be can be booked through a vast network of BSP-affiliated travel agencies, covering 70 to 90% of the market.”
Moreover, membership in the IATA Clearing House streamlines operations, enabling seamless ticket issuance for flights combining Madagascar Airlines’ services with those of other carriers. This ensures equitable revenue distribution, the CEO notes.
Fleet Expansion
Meanwhile, Madagascar Airlines plans to expand its fleet by acquiring six new ATR 72-500s in the coming months. The airline will initially receive four aircraft, followed by two more in late 2024 or early 2025, according to Midi-Madagascar. These additions will bolster the company’s domestic operations and aircraft maintenance capabilities.
Reports from 24.24 Magazine indicate that two of the ATR 72-500s will be leased from Dublin-based ACIA Aero Leasing, a regional aircraft specialist. This arrangement follows a decree issued by the Malagasy government on March 13, 2024, empowering the Ministry of Economy and Finance to provide a guarantee on behalf of the state. This initiative aligns with Madagascar Airlines’ recovery program spearheaded by Thierry de Bailleul, aiming to strengthen domestic networks and resume regional and international flights by 2030.
The issuance of a sovereign guarantee was a prerequisite for leasing aircraft, with the government agreeing to facilitate World Bank financing for Madagascar Airlines. The World Bank proposed this financing, culminating in an agreement to reimburse the state for expenses incurred in the airline’s recovery efforts.
Notably, this isn’t the first time the state has provided support to Madagascar Airlines. The 2023 Finance Act included a $20 million sovereign guarantee for leasing new aircraft. However, plans to acquire an Embraer 190 E2 and a Dreamliner fell through.
In a statement dated Nov. 7, 2023, Madagascar Airlines revealed substantial losses since its launch in April 2022. High operating expenses for long-haul flights, particularly using wet-leased aircraft, coupled with escalating jet fuel costs, contributed to accumulated losses of approximately USD 50 million and debts of USD 36 million.
The airline emphasized the economic unsustainability of continuing ACMI flights, which incurred losses of around $300,000 per rotation. At the moment, Madagascar Airlines operates six ATR72 aircraft, with only two in service, inherited from its state-owned predecessor Tsaradia, primarily serving domestic routes
