Malaysia Airlines left_ANZ_HFF_Karryon_Lockup_Flex
Malaysia Airlines_Right_ANZ_HFF_Karryon_Lockup_NFS

Air Mauritius In Voluntary Administration: South African Airways Close To Collapse

In what has been another incredibly tough week for the airline industry, Air Mauritius, like Virgin Australia has announced it has also entered voluntary administration due to the commercial fallout from the coronavirus pandemic. Sadly, the writing appears to be on the wall for South African Airways too.

In what has been another incredibly tough week for the airline industry, Air Mauritius, like Virgin Australia has announced it has also entered voluntary administration due to the commercial fallout from the coronavirus pandemic. Sadly, the writing appears to be on the wall for South African Airways too.

While Air Mauritius was already in the middle of restructuring the airline, in a statement yesterday, the board of directors said while “substantial progress” had been made in developing its action plan, the closure of borders and halting of air services because of the coronavirus has led to a “complete erosion of the revenue base”.

Board Communique – 22 April 2020

Posted by air mauritius on Wednesday, April 22, 2020

Air Mauritius was forced to ground planes at the start of April because of coronavirus restrictions with flights originally due to resume again on May 15, 2020.

“There is uncertainty as to when international air traffic will resume and all indications tend to show that normal activities will not pick up until late 2020,” the airline said.

“In these circumstances, it is expected that the company will not be able to meet its financial obligations in the foreseeable future.

Air Mauritius

“The board, therefore, took the decision to put the company under voluntary administration in order to safeguard the interests of the company and that of all its stakeholders.”

The news was posted on Air Mauritius’s Facebook page with numerous people sending comments of goodwill and hope that the airline will be saved.

Here’s hoping it will be.

READ: This Is Not The End For Virgin Australia But What Happens Now?

One Facebook user Roland Müller-Buchner wrote;

Dear Air Mauritius staff,

This is sad news, but I remain confident that MK will emerge stronger from this. In these days many people realise the value of a flag-carrier and it’s relevance as an essential industry.

MK is certainly needed locally, otherwise, Rodrigues will lose their link to the main island. Internationally, MK can benefit from the potential demise of SAA (South African airlines). As terrible as that is in its own right.

Also, as a hypothesis, post C19, pax will even more value nonstop flights (like EU-MRU). We all are confined to virtual travel now. It will change again.

Pre COVID-19, Air Mauritius operated 3 weekly direct services between Perth and Mauritius on Wednesday, Friday and Sunday.

Air Mauritius also codeshared on flights operated by Virgin Australia beyond Perth to Melbourne, Sydney, Brisbane and Adelaide.

Meanwhile, South African Airways (SAA), already in administration is also widely anticipated now to be the brink of a complete collapse.

Last week, the state-owned carrier suffered the latest in a series of financial setbacks after the government rejected a request by administrators restructuring of the airline for an additional 10 billion rand (AU$836 million) in funding.

86-year old SAA has totalled 32 billion rand (AU$2.7 billion) in losses since 2008 and since the start 2020 has already relied on 3.5 billion rand (AU$293 million) in emergency funding issued by the state development bank.

The increasing lack of viability for the national carrier comes amid a nationwide lockdown in South Africa aimed at slowing the spread of COVID-19 that had led to SAA suspending most flights through to the end of May. This date will undoubtedly now be extended.

Given the uncertainty of a return to flying and losses already ammassed, it’s unlikely that the government will have an appetite to invest further in SAA.

It’s believed that if SAA does collapse altogether, the 4,700 workforce will be made redundant with severance packages offered dependent on the length of service with the airline.