QUOTE OF THE WEEK
 Only two things does he (the modern citizen) anxiously 
wish for -- bread and circuses.
                                                       -- Juvenal

Do the stakeholders of the tourism industry have a "strategy" to serve the industry?

Not so sure!

I remember when I was in secondary school, our English teacher gave us an essay to write on the advantages and disadvantages of tourism. When the Economics teacher walked in next, he could not help but comment on one of the disadvantages of tourism listed on the blackboard – "from an economics perspective, it is far better to see the tourists 'topless' than to see the Mauritians 'bottomless'!" While this statement was true a decade ago, it is even more relevant today when the Mauritian economy is becoming heavily reliant on tourism.  The weakening of the sugar and textile industries has left us no choice than to concentrate on tourism.

The month of February 2006 has been an important milestone in our tourism industry. Air India announced the start of its operation on the 29^th of March – this was one of the outcomes of the road-show held in India by a delegation of businessmen headed by the Minister of Tourism. Qatar Airways and Etihad are expressing their wish to fly to Mauritius. Lauda Air announced that it would stop its operation on Mauritius as from end of March. Air Mauritius announced that next year it would operate to Madrid and would increase its frequencies to Italy. The month of February was also important for the stakeholders in the tourism industry – they all participated in the 'assise du tourisme', a forum to set the objectives for the tourism industry and define the strategies to meet those objectives.

Lauda Air started its operation to Mauritius in June 2004 and, after less than two years, decides to pull out of the route. It is quite surprising to note that most stakeholders did not bother to comment on the cessation of Lauda's operation to Mauritius. Why was there no reaction from the hoteliers? Why did they react when Air Mauritius decided to pull out of Austria? Where have all the arguments gone? Why did Lauda Air decide to stop flying to Mauritius? In August 2004, they expressed their interest to double their frequencies to two weekly flights. How come they want to stop operations suddenly? What was the reaction of Air Mauritius, code share partner of Austrian Airlines? 

" Nous continuerons à vendre Maurice en Autriche à travers notre bureau de Vienne. La clientèle autrichienne sera redirigée vers notre hub de Francfort ou ceux de Londres, Paris ou Munich," explique Robert Alizart, porte-parole d'Air Mauritius. Les avions du Paille en Queue ne retourneront pas à Vienne. Air Mauritius avait abandonné cette route car son taux de remplissage moyen ne justifiait pas une desserte directe régulière. Le transporteur mauricien persistera donc avec sa stratégie de desservir uniquement des hubs qui servent aussi de points d'éclatement."

 The national airline re-iterated its intention to consolidate its hubbing strategy and not to operate to Vienna again. Is Vienna no longer a hub for Eastern European countries? Our tourist arrivals from Austria have increased by 17% from 2003 to 2005. Has the national airline decided to leave these markets to charter airlines? Is Air Mauritius always here for Mauritius? (Last week, in an interview given in l’express, Mr Espitalier-Noel told us that 'Les autres compagnies peuvent abandonner à n'importe quel moment. Nous, nous restons. Vaches grasses ou vaches maigres, nous sommes là…') Air Mauritius has to evaluate its business opportunities; the company should feel free to discontinue unprofitable routes if it makes business sense. However, it should refrain from making us believe that its mission is only to serve the country…

Further, Air Mauritius expressed its intention to operate to Spain as from April 2007. Why Spain? Is operation to Madrid (as opposed to Vienna) in line with the hubbing strategy of Air Mauritius? Would it not hav e been more logical to operate to Amsterdam instead? Or, for that matter, why not use the aircraft to operate an additional frequency on London (rather than buying seats on Air Seychelles)?  

The above table summarises the tourist arrivals from Austria and Spain. While most of the Austrian tourists were carried by Austrian Airlines and Air Mauritius, the Spanish tourists were flown in by Air Mauritius, Air France and British Airways among others – we can assume that half of the tourists from Spain flew Air Mauritius. Does the operation of a direct flight guarantee that all the tourists will move to the direct flight? What type of fares will Air Mauritius practise in the market? Will they match the fares of the competitors (Air France, British Airways, etc)? What about the profile of the tourists? Are the Spanish tourist s price sensitive? What will they choose a more expensive direct flight or a cheaper flight via Paris, London, Munich or Frankfurt (on Air Mauritius & its competitors)? Will Air Mauritius be able to sell its business class and first class seats to the Spanish market? How long will Air Mauritius wait before discontinuing operations (if unprofitable)? 

We also learnt in the press that some years back the national airline discontinued operations to Madrid -- how long did it wait before discontinuing in the past? But, if the national airline has reached this decision after rigorous analysis, then we should only wait and hope that this decision reaps positive results. 

This month, the Minister of Tourism headed a delegation to promote Mauritius in India. An Indian newspaper, (The Hindu Business Line of 15^th February), reported the following:  

"From April next year, the airline plans to start operating Airbus A-340 aircraft to India. This will have more than double the number of seats being offered on the route," a senior Air Mauritius official said. The existing aircraft can only carry about 170 passengers, he added. 

Does Air Mauritius have a choice? Can it continue to operate aircraft with 170 seats? The national airline will be getting rid of its two Boeing 767 aircraft early next year and will be replacing those with the bigger A340. Will it have any aircraft smaller than the A340 to fly to India? Will the national airline deploy the same capacity with the coming of Air India? Will it be able to offer more frequencies (and still be profitable!) with the A340 aircraft? What if Jet Airways is granted air access? Jet Airways has expressed its wish to start operating to Mauritius. The airline has recently merged with Air Sahara such that they are currently in a transition phase. Once the situation is back to normal, they might wish to start flying to Mauritius. 

Last year, Jet Airways leased some A340s from South African Airways to start their operation to Europe and they are doing really well. They are practising the same fares as the other Indian airlines and yet operating at almost full capacity. Is the national airline ready to face such competition? Or will the national airline have no choice than to seek a code share agreement with them?

The Mauritian economy has become very fragile. We only need to look around us to see how lucky we have been so far – the tourism industry in La Reunion, our neighbour island, has been adversely affected by 'Chikungunya'; we have also seen the tourism industry of South East Asian countries and Sri Lanka affected by the Tsunami last year. It is not certain that everything is uncertain -- we have been lucky so far but…

CASSANDRA V