Air Mauritius fleet development restructuring plan
Market reality and financial restructuring pushed Air Mauritius to cut its fleet to just nine aircraft and three types. But with its market disappearing is it missing the opportunity to embrace the newest of airline darlings, the longhaul narrowbody, to claw its way back to profitability?
Air Mauritius first took to the skies in 1972 with a six-seater Piper Navajo and in 1973 started long-haul operations to London with a Super VC-10 leased from British Airways. Since then its fleet has comprised more than 15 aircraft types, a mix of Airbus, Boeing, ATR, DeHavilland Canada and Lockheed aircraft.
The airline was placed in voluntary administration in April 2020, after posting a loss of €240 million ($265m) for 2019/20, with losses between March 2018 to March 2021 totaling €329 million ($364m). In the same period its total debt had grown from €68 million ($75m) to €609 million ($673M), so restructuring was needed to keep it afloat.
Even before the pandemic, Air Mauritius was grappling with its business model, with the 2019 annual report identifying route and fleet consolidation as priorities for management. It had a fleet of 12, a mix of A319, A330, A340, A350 and ATR72 aircraft and had returned three A340-300 aircraft during the year.
Between 2015-2019 Air Mauritius grew passenger numbers from 1.37 million to 1.72 million, maintained load factors around 78% but also recorded losses in three of those five years, including €29 million ($32m) in 2018/19.
The airline emerged from restructuring in October 2021, after the government of the Republic of Mauritius injected $280 million ($309m) and major creditors voted to exit the restructuring. It emerged with nine aircraft: two A330-900, four A350-900 and three ATR 72-500 aircraft, which reduced the fleet's average age from thirteen to less than four years.
Prior to the pandemic Air Mauritius' market was fairly evenly divided, with 35% of revenue from Europe, 31% from the Indian Ocean/Africa/Middle East, 29% from Asia and 5% from Australia. It has resumed flights to Paris, London, Mumbai, Johannesburg, Reunion, Madagascar and Rodrigues Island.
With its reliance on inbound traffic it's not surprising that widebodies form the backbone of Air Mauritius' fleet, and it has done well to emerge from administration with current generation, fuel-efficient aircraft that can economically and comfortably handle flights to Paris, London, Mumbai, Johannesburg, Asia and Australia.
Air Mauritius' success is dependent on Mauritius rebuilding its tourism industry and quickly getting back to the 1.38 million who arrived in 2019, but with arrival numbers plummeting to 180,000 in 2021 AM has a tough road ahead to find enough passengers to fill its widebodies.
Airbus has built a strategy of pairing its aircraft, such as the A330 and A350, so that airlines can build capacity and mix frequency to match demand, particularly in emerging markets. The opportunity today is in pairing the A321LR/XLR with the A330neo as the answer to the longer, thinner routes that are defining airline travel's rebirth out of COVID.
The idea is to enter a new route with the A321LR/XLR to build market share while increasing frequency as numbers start to grow, with the superior single-aisle economics delivering profits from lower volumes.
When demand spikes on certain days or times, say weekends or peak times, the larger A330 is added, matching the capacity to demand, while keeping the A321 on the route for the quieter times.
This is similar to what Jetstar Australia is planning to do with its new A321LR aircraft when they arrive, most likely in 2023. CEO Gareth Evans says they will use them on Australian domestic routes during the day, fly them to an overseas port overnight and return to Australia to be ready for another day of domestic flying. When the demand is there, Jetstar can return to using its Boeing 787 Dreamliner on the route and use the A321LR on other routes.
Air Mauritius has had a tough time through the pandemic and while it has taken sensible steps to reshape its fleet there may be an opportunity to look at what the single-aisle can do for its profitability, particularly on routes to Mumbai, Perth, Johannesburg and Kuala Lumpur, all within reach of the A321XLR.
Added to the economics are the new Airspace cabin layouts that bring widebody elegance into a single-aisle cabin, extending to the suites and lie-flat beds seen on the JetBlue A321neo aircraft on transatlantic services. Perhaps it's something to think about?
