Vers un rebranding...Air Madagascar devrait céder la place à Madagascar Airlines
On 13 October, the Malagasy government, meeting in the Council of Ministers, approved Air Madagascar's request to be placed under bankruptcy protection. This mechanism, equivalent to the American Chapter 11, aims to protect the company against its creditors and a possible bankruptcy while it seeks to restructure.
The information has been widely reported in the local press in recent days. Air Madagascar and its subsidiary Tsaradia should merge to become Madagascar Airlines. Once effective, this will be the third name in the history of the company, which at the time of its creation in 1961 was called Madair before becoming Air Madagascar, in 1962.
This change of name would be one of the highlights of the start of the judicial recovery of the national flag, whose government approved, on October 13, its request for "a collective procedure for the discharge of liabilities.
According to 2424.mg, the plans of the "new flagship" are defined around the rental of a Boeing 787 to ensure from November 6 next a link to France with two weekly rotations initially. Still in the company's envisaged international perspectives, an Airbus A340 (leased from Air France) currently being registered will operate the route to China, says 2424.mg. On the regional level, an Embraer 1000 taken on lease will be deployed from 23 November to Mauritius and Reunion. The domestic market will remain covered by its ATR fleet.
The challenge of debt repayment
To date, Air Madagascar's accumulated losses are close to 80 million dollars for a total debt of 72 million dollars. The Malagasy government indicates that "the majority of these debts date from the co-management of Air Madagascar with Air Austral", mentioning in particular "the rental of ATR aircraft at an exorbitant price, which represents double the normal price, from Air Austral".
This accusatory and vindictive finger pointed at the Reunionese carrier contrasts with its position, which, at the end of the collaboration, claimed to have left a "reorganized company, with a modernized product and restored flight capacities", which "can now, thanks to new financing, project itself internationally and capitalize on a domestic network that is meshed and more efficient". As a reminder, at the end of 2017, Air Madagascar signed a strategic partnership with Air Austral around an ambitious development plan. At the end of July 2020, the two parties abruptly interrupted this marriage and since then, the State has struggled to regain control of the destiny of its national flagship.
Obviously, the State is not totally absolved from Air Madagascar's balance sheet and recognizes in every respect the conclusions of the audit entrusted to the BearingPoint firm. Indeed, this audit revealed corruption, mismanagement, financial mismanagement and lack of rigorous control for several years. "Fixed costs have also continued to increase, particularly the number of employees, which far exceeds the company's real needs," the government acknowledges.
During the restructuring phase, which will be accompanied by a massive downsizing, the Malagasy state (sole shareholder) promises to put all contracts back on the negotiating table. But above all, it will emerge from the recovery with a healthy airline that "places excellence in its operations, ensures reliability, regularity and punctuality in its offers".
