MURLI DHAR

What future for Air Mauritius?

Murli Dhar

“It is being aired that Air France could now become the future strategic partner of Air Mauritius. It is seriously doubted that this partnership would have any positive impact on the profitability of the national airline. We are fairly familiar with the attitude of certain co-investors to block rather than to advance the scope of local enterprises. Air Mauritius could find itself locked up in a position of subsidiarity to Air France…”

We have already made the point that Air Mauritius is strategically and economically important for Mauritius. Other airlines come and go depending on how much profits they can make or not make by serving the destination. In the case of Air Mauritius, it is different. Other than being a company in its own right, Air Mauritius is the most dependable link we have to the rest of the world. Mauritius is out of the mainstream of global axes of movement of people and goods. However for all these years, Mauritius is not even concretely connected to the African continent in a manner that makes economic sense. Air Mauritius should have developed its own fine product over this tranche of the market, creating a flux where there was none or very little of it. This is where an airline operating with the finest competitive edge is relevant to position us internationally.

At one time in its history, Air Mauritius held out the promise that it would become an important cornerstone in the international destiny beckoning our island. This promise applied just as much to movement of people as to that of airfreight. Somewhere down the road, a dozen years earlier, things suddenly took a turn for the worse. The classic argument was brought out to explain this state of affairs: international market conditions were not as supportive as they had been. That happens, no doubt. There are business cycles with ups and downs and one has to reckon with them. What about the human resource? An intelligent management foresees them and takes steps to ward off or mitigate difficulties. The tougher market conditions turn out to be, the more the need to rationalize costs, work stations, itineraries and target markets.

Successive managements failed however to uphold the airline as they should have. It appears the airline became a playfield for power games in which management became some sort of a pawn. The finances of the company ceased to be brilliant despite a persistent increase in passenger and goods traffic through Plaisance Airport. Statistics bear out that the volume of these has not plummeted. The latest international economic crisis came only in 2008. But Air Mauritius had been losing out even before the crisis. In fact, the catastrophic fuel hedging decision in the first year of the crisis spinning the airline into huge losses, came to confirm that, apart from suffering for kowtowing to vested interests, there was a deep flaw in management itself.

Successive changes in management failed to improve the situation and to put the airline into a healthier financial condition. Yet another change in management was ushered in after one of the airline’s newly appointed chief executives registered the briefest stay ever at the top of the company. Instead of doing the professional overhaul the company was badly in need of, fudging up was carried forward.

At this stage, the prospect of the company is unclear. It joined into a code sharing arrangement with Air France for a number of years but this has proved to be of no avail to redress its economic viability. Despite the poor record under this arrangement, it is being aired that Air France could now become the future strategic partner of Air Mauritius. It is seriously doubted that this partnership would have any positive impact on the profitability of the national airline. We are fairly familiar with the attitude of certain co-investors to block rather than to advance the scope of local enterprises. Air Mauritius could find itself locked up in a position of subsidiarity to Air France both in terms of payload and revenues generated, if past experience with similar deals is any guide.

Considering the difficulties that Air Mauritius has faced over more than a decade now, it is by generating greater internal efficiency that the airline could have surmounted its handicaps. A good management of the airline, allied with a government pursuing an intelligent open skies policy, would have helped identify the revenue generating markets Air Mauritius should be serving. There is a tough world outside. It was necessary to respond to it with an internal discipline going towards expanding own scope by dint of one’s efforts, not flying under the wings of somebody else.

Air Mauritius can still make it, the less there is outside interference in its upkeep and autonomous running. Mauritius is unfortunately a place where a lot of irrationality interferes against the efficient working of many a workplace. If this were to stop and the professional management given a freer hand and the company’s board composition decided solely by the extent of strategic aviation expertise each member has, we would not have to hold out the hands of so-called strategic partners that can reduce to nearly nothing years of toiling that went at one time into the making of a respected national airline.

Murli Dhar

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