Air Mauritius: A Last-Ditch Salvage or a Fresh Start?

Editorial

For decades, Air Mauritius was a source of national pride. The airline connected the people of Mauritius to distant shores, bore the major brunt of carrying incoming tourists and gave the country a visible presence in the skies. Today, however, Air Mauritius is not just struggling — it is limping along, weighed down by years of chronic mismanagement, political interference, and a staggering misuse of public funds.

The story of Air Mauritius’ downfall is not one of simple business missteps; it is one of systemic failure. The company’s descent into financial turmoil did not begin with the Covid-19 pandemic since it placed itself in voluntary receivership months before the outbreak, but the crisis laid bare the structural weaknesses that had long been accumulating. The decision during the pandemic to hurriedly sell newly acquired aircraft for bargain prices, dismantle others for parts, and terminate the employment of hundreds of skilled staff, was emblematic of a leadership scrambling to survive without a coherent recovery plan. These were not decisions driven by market realities — they were desperate measures rooted in a decade of misgovernance and political interference.

Perhaps the most damning indicator of the airline’s instability is the revolving door of leadership. In just over 20 years, Air Mauritius has seen twelve CEOs come and go and now prepares to welcome in mid-October its thirteenth in André Viljoen, a previous MK CEO, who returns after a successful decade at the helm of Fiji Airways. While Viljoen brings with him experience and a measure of credibility, the pattern of leadership turnover reveals deeper structural issues that no single individual can fix easily. Leadership instability erodes strategic continuity, weakens internal culture, and discourages long-term planning — all vital elements for the survival of any airline in a hyper-competitive global industry.

Political interference is a recurring theme in the airline’s history and one that has proven corrosive. Board appointments, top management placements, and major financial decisions have often reflected priorities other than sound business judgment. At one time any Foreign Minister fresh from an overseas trip would press for MK to service that destination in China or Africa. At other times some senior advisor with no air carrier management credentials would press for changing our hub in Kuala Lumpur to Singapore or that MK switches from Heathrow to Gatwick. Air Mauritius has repeatedly served as a vehicle for patronage rather than as a commercial enterprise with clear strategic objectives. In this context, blunders like the disastrous fuel-hedging contracts and more recent reckless aircraft purchases — followed by rushed sales — only worsened the airline’s troubles.

One of the most serious revelations came when Prime Minister Navin Ramgoolam, in response to a parliamentary question from MP Manoj Seeburn in April 2025, revealed the full extent of losses incurred through aircraft sales and operating deficits between 2014 and 2024. Losses of over MUR7.7 billion, with multiple aircraft offloaded at substantial loss, expose not only poor commercial judgment but raise red flags about deeper financial improprieties. Navin Ramgoolam has gone as far as to allege outright theft of funds, promising a thorough investigation and prosecution of those responsible. Following which MK has appointed the international firm Kroll as Auditing consultants to probe and report on the matters. If confirmed, these claims would represent a serious breach of public trust in Mauritius’s post-independence economic history.

The situation becomes even murkier when one considers the role of Airport Holdings Ltd (AHL), the state-owned shareholder into which Air Mauritius was folded during the airline’s administration phase. Ostensibly created to manage the group’s assets and inject capital, AHL also served another purpose: to apparently manipulate the government’s debt-to-GDP ratio by shifting liabilities off the state’s balance sheet. PM Ramgoolam alleged that the Ministry of Finance artificially inflated AHL’s value from MUR10 billion to MUR51 billion through questionable “goodwill” accounting. This overvaluation then facilitated the Mauritius Investment Corporation’s (MIC) controversial MUR25 billion investments in AHL for a 25% stake — a valuation completely at odds with the World Bank’s own estimate of the group’s worth at just MUR5 billion.

These are not mere accounting anomalies; they are deliberate distortions of financial reality, enabled by opacity and a lack of accountability. Worse, according to the Prime Minister, an additional MUR2.5 billion meant for Air Mauritius’ working capital was redirected without proper authorization. KPMG has been mandated to conduct a forensic audit, but the real question is whether the findings will lead to meaningful consequences or merely become another chapter in the long book of state enterprise failures.

This scandal cannot be viewed in isolation. The problems afflicting Air Mauritius are symptomatic of a broader malaise afflicting many of Mauritius’ state-owned enterprises (SOEs). The pattern is familiar: public technocratic and banking institutions undermined by political meddling, managerial appointments based on loyalty rather than competence, strategic decisions taken behind closed doors, and billions in public funds vanishing without meaningful outcomes. For a country that prided itself on good governance and macroeconomic discipline at one time, the actual performance of its public entities tells a very different story.

Public enterprises like Air Mauritius are not simply commercial ventures — they are instruments of national development. They carry the hopes of citizens, the prestige of the state, and play strategic roles in the economy. The misuse of these institutions for political gain is not just inefficient; it is deeply unethical. It betrays not only taxpayers but also the generations of dedicated employees, technicians, pilots, and engineers who have worked to uphold the airline’s reputation over the decades.

If Mauritius is serious about restoring confidence in Air Mauritius, and in its broader economic governance, then the reforms must be far-reaching. First, there must be a complete depoliticisation of the management structure. Lobbying, power games, banana skins and clannish loyalties must be recognised for what they are: deeply counter-productive. There should be little sympathy for potential conflicts between the Board or its Chairman, sticking to general policy directions and the newly appointed CEO entrusted with full management autonomy within the cadre set by its Board. Performance metrics must be transparent and enforceable, and internal governance mechanisms must be robust enough to flag financial mismanagement before it becomes systemic.

Second, the findings of the Kroll or KPMG forensic audit must be made public. If the audit confirms misappropriation of funds or criminal negligence, prosecutions must follow. Accountability cannot be selective or symbolic — it must be real. Only then can public faith in the airline, and in state governance more broadly, begin to be restored.

Lastly, Air Mauritius must modernize — not only its fleet, but its entire business model. The open skies policy has increased competition, and passengers today demand efficiency, reliability, and service excellence. Perks and gratifications such as free tickets, upgrades or lifetime travel to board members, who by the way receive handsome allowances, must be a thing of the past. If the airline continues to rely on state bailouts rather than becoming genuinely competitive, it will continue to erode public confidence and drain national resources.

Air Mauritius can still be salvaged, but only through a painful process of truth-telling, reform, and accountability. The airline is more than just a legacy brand — it must become a symbol of the country’s outward-looking spirit and economic resilience, here to serve with a real smile our travelling countrymen, guests and incoming tourists, without being prey to the latter industry’s constant demands for more destinations, lower prices or higher frequencies. Services at the airport must accompany this process, with clear “cahier de charges” pricing for instance for the cafeterias or restaurants. A departing tourist with four kids cannot be held ransom at gun-point for soft drinks, let alone a meal, an experience that can ruin the experience of her otherwise happy sojourn.

We understand some of the legacy difficulties inherited by the current leadership but earnestly trust that inordinate flight delays or cancellations without proper communication to travellers or even, at times, front-line staff, should be rapidly behind us, particularly with the appointment of a full-time CEO.

Mauritius Times ePaper Friday 30 May 2025