Key Takeaways
• Air Mauritius targets profitability by 2026-27 after €317 million losses since 2000, ending technical insolvency in 2025.
• The airline plans operational streamlining, new hires, fleet order cancellations, and funding efforts starting April 2025.
• New leadership under Chairman Kremchand Beegoo drives transparency, audits, and market adjustments amid stiff competition.
Air Mauritius Sets Sights on Profitability by 2026-27: What It Means for the Airline, Mauritius, and Stakeholders
Air Mauritius, the national airline of Mauritius 🇲🇺, has announced a bold plan to return to profitability by the 2026-27 financial year. This target, set by Chairman Kremchand Beegoo, comes after years of financial losses and operational challenges. The airline’s recovery plan is already underway, with a series of financial, operational, and leadership changes designed to put Air Mauritius back on solid ground. The outcome of this effort will have a direct impact on the country’s economy, tourism, and global connections.
Air Mauritius’s Recovery Plan: Who, What, When, Where, Why, and How
Who: Air Mauritius, led by Chairman Kremchand Beegoo and a newly appointed Board of Directors.
What: A comprehensive restructuring and recovery plan aimed at achieving break-even in the next year and profitability by the 2026-27 financial year.
When: The plan is already in motion, with key milestones set for the 2025 and 2026-27 financial years.
Where: The airline operates from Mauritius 🇲🇺, serving international destinations across Africa, Europe, Asia, and the Indian Ocean region.
Why: Years of financial losses, technical insolvency, and operational inefficiencies have threatened the airline’s future and, by extension, the country’s tourism and economic stability.
How: Through a mix of financial restructuring, operational improvements, fleet adjustments, and leadership changes.
Let’s break down the details of this ambitious recovery plan and what it means for different groups connected to Air Mauritius.
The Financial Challenge: Years of Losses and a Path Forward
Accumulated Losses and Technical Insolvency
Air Mauritius has faced serious financial problems for over two decades. Between March 2000 and March 2024, the airline lost about €317 million (Rs 15.5 billion). By early 2025, it also had a shareholder equity deficit of about €195 million (Rs 9.6 billion). This means the airline owed more than it owned, a situation known as technical insolvency. Prime Minister Navin Ramgoolam publicly acknowledged this earlier in the year.
Major Financial Restructuring
A turning point came on March 31, 2025, when Air Mauritius’s parent company, Airport Holding Ltd (AHL), converted a large loan of MUR8.05 billion (USD176 million) into equity. This was done using Non-Voting Convertible and Redeemable Preference Shares (NCRPS). In simple terms, this move gave the airline a stronger financial base and showed suppliers, banks, and other partners that the government was committed to supporting the airline.
Key outcomes of this move:
– Air Mauritius emerged from technical insolvency.
– The airline could finalize its delayed 2024 financial statements.
– Suppliers and creditors gained more confidence in the airline’s future.
However, even after this step, Air Mauritius still had a negative equity of about Rs 2 billion that needed to be addressed.
The Roadmap to Profitability: Budget, Funding, and Operations
New Budget Operating Plan
Starting April 1, 2025, Air Mauritius launched a new Budget Operating Plan with clear goals:
– Streamline operations to cut waste and improve efficiency.
– Recover Rs 2 billion within the next year.
– Break even within one year and reach profitability by the second year.
Additional Funding Efforts
To support its recovery, Air Mauritius is working on several funding initiatives:
– Working with the government to raise an extra MUR2 billion (USD44 million).
– Seeking support from the Mauritius Investment Corporation (MIC), which is part of the Bank of Mauritius.
– Using about €25 million (Rs 1.2 billion) in unflown ticket sales to help improve cash flow.
Operational Improvements
Chairman Kremchand Beegoo has led several changes to make the airline run better:
– Internal reorganization to improve teamwork and accountability.
– Strict cost controls across all departments.
– Targeted hiring: In April 2025, the airline planned to hire 12 technicians and 16 engineers to strengthen its technical team.
– Technical partnership with Airbus to support aircraft maintenance.
– Reinstatement of Laurent Recoura as Chief Commercial Officer to boost commercial performance.
– Hiring three financial experts to improve cost management and budgeting.
Fleet Restructuring: Matching Aircraft to Market Needs
Current Fleet
Air Mauritius operates a fleet of:
– Four Airbus A350s
– Four Airbus A330s
This mix is considered enough for the airline’s current needs.
Changing Aircraft Orders
The airline is in talks with Airbus to cancel orders for three Airbus A350-900 aircraft that were supposed to be delivered in 2026 and 2027. These planes are worth about $900 million. The reason for this change is that demand on some routes is lower than expected, so the airline doesn’t need these extra planes right now. The goal is to avoid taking on more debt and costs that the airline can’t afford.
Maintenance and Spare Parts
Maintenance has been a big challenge:
– Flight delays have happened because of long maintenance times in Italy and problems caused by planes sitting unused during the pandemic.
– The airline may lease a spare aircraft to help keep flights on schedule.
– The technical department’s budget had grown to Rs 5 billion a year (€102.25 million), about 19% of total expenses.
– There is a stock of Rs 442 million (€9.04 million) in obsolete spare parts that needs to be dealt with.
Leadership and Governance: New Direction, New Accountability
Leadership Changes
On January 13, 2025, Air Mauritius appointed a new Board of Directors. Kremchand Beegoo took over as Chairperson from Marday Venketasamy. Beegoo has been open about the airline’s problems, blaming “a decade of mismanagement including poor strategic decisions” for the current crisis.
Ownership Structure
Air Mauritius is owned by Airport Holdings Ltd (AHL), which is split as follows:
– Government of Mauritius 🇲🇺: 51%
– Mauritius Investment Corporation (MIC): 49%
Investigations and Audits
To ensure transparency and fix past mistakes, several investigations are underway:
– A full audit led by Beegoo to find urgent problems.
– Kroll, a global advisory firm, is looking into three major fleet transactions that happened during the airline’s voluntary administration in 2020-2021.
– An internal investigation into an engine damage incident that led to a financial penalty.
Market Context: Route Network, Competition, and Demand
Route Network Development
Despite its financial troubles, Air Mauritius is planning to expand its network:
– New routes to Dubai and Singapore are being considered using the current fleet.
– The airline is also adjusting flight frequencies to better match demand.
Market Conditions
The airline is responding to changes in the market:
– Demand on Indian Ocean routes is lower than what was expected when the airline ordered new planes a few years ago.
– This has forced Air Mauritius to rethink its network and aircraft needs.
Competitive Landscape
Air Mauritius faces tough competition from other regional airlines. Other challenges include:
– Volatile fuel prices
– Currency fluctuations
– Changes in travel patterns after the pandemic
Industry experts believe that if Air Mauritius sticks to its plan and gets continued political support, it could start to stabilize by mid-2026.
Implications for Mauritius: Tourism, Jobs, and National Pride
The success or failure of Air Mauritius’s recovery plan will have a big impact on the country:
- Tourism: Air Mauritius is the main way many tourists reach Mauritius 🇲🇺. A strong national airline supports the tourism industry, which is a key part of the country’s economy.
- Jobs: The airline provides direct and indirect jobs for thousands of people, from pilots and engineers to ground staff and suppliers.
- National Pride: As the flag carrier, Air Mauritius is a symbol of the country’s independence and global connections.
- Investor Confidence: A stable, profitable airline can boost confidence in Mauritius’s broader infrastructure and economy.
Stakeholder Perspectives: What This Means for Different Groups
For Employees
Staff at Air Mauritius have faced uncertainty for years. The recovery plan offers hope for job security and a more stable work environment. The airline’s focus on hiring skilled technicians and engineers shows a commitment to building a stronger team.
For Passengers
Travelers can expect more reliable service as maintenance and operational issues are addressed. New routes to Dubai and Singapore could offer more travel options for both tourists and business travelers.
For the Government
The government’s majority ownership means it has a direct stake in the airline’s success. A profitable Air Mauritius reduces the need for government bailouts and supports the country’s economic goals.
For Investors and Partners
Suppliers, banks, and other partners will watch closely to see if the airline can stick to its recovery plan. The recent loan-to-equity conversion and ongoing audits are positive signs of transparency and commitment.
The Road Ahead: Challenges and Opportunities
Chairman Kremchand Beegoo has warned that “reversing a decade of damage would take time” and that “we will not be able to change in three months what has been done wrong in 10 years.” Still, the airline now has a clear plan and the support of its main stakeholders.
Key challenges ahead include:
– Addressing the remaining negative equity of Rs 2 billion.
– Successfully canceling or postponing unnecessary aircraft orders.
– Keeping costs under control while improving service quality.
– Adapting to changing market conditions and competition.
Opportunities include:
– Expanding to new markets with the current fleet.
– Building a stronger, more accountable team.
– Restoring the airline’s reputation and financial health.
Official Resources and Further Reading
For readers interested in the official structure and oversight of Air Mauritius, more information can be found on the Government of Mauritius’s official website, which provides updates on state-owned enterprises and national economic policies.
As reported by VisaVerge.com, the airline’s recovery plan is being closely watched by industry experts, government officials, and the public. The next two years will be critical in determining whether Air Mauritius can achieve its goal of profitability by the 2026-27 financial year.
Practical Takeaways and Next Steps
- For travelers: Watch for new routes and improved reliability as the airline implements its recovery plan.
- For employees: Stay informed about internal changes and new opportunities as the company hires more technical staff.
- For investors and partners: Monitor the airline’s financial statements and official announcements for signs of progress.
- For policymakers: Continue to support transparency, good governance, and responsible investment in the national carrier.
Air Mauritius’s journey to profitability is not just about numbers—it’s about securing the future of a vital national asset. The steps taken now will shape the airline’s role in connecting Mauritius 🇲🇺 to the world for years to come.
Learn Today
Technical Insolvency → A financial state where liabilities exceed assets, causing a company to owe more than it owns.
Non-Voting Convertible and Redeemable Preference Shares → Special shares allowing conversion to equity without voting rights, used for financial restructuring.
Budget Operating Plan → A strategy to streamline operations, cut costs, and break even within a set timeframe.
Fleet Restructuring → Adjusting aircraft orders and composition to align with market demand and financial capacity.
Shareholder Equity Deficit → Negative net assets indicating that shareholders’ investments are less than the company’s total liabilities.
This Article in a Nutshell
Air Mauritius aims to recover from years of losses with a clear plan for profitability by 2026-27, led by Kremchand Beegoo. Operational and financial restructuring, fleet management, and new routes are central to this effort to restore the airline’s role in Mauritius’s economy and tourism.
— By VisaVerge.com
