Suspension of your flights : Madagascar Airlines explains

Madagascar Airlines temporarily suspends its international and regional flights due to its financial situation. In this article, the CEO of the company, Thierry de Bailleul explains.

Governance

Last Saturday (the 04 November 2023), Madagascar Airlines has appointed its new PCA, who is today Mr Mamy RAKOTONDRAIBE. This change will allow better alignment with a BCP concerned with the search for profitability and organizational performance.. It will also enable greater performance of the company and its employees..

Plan d’Affaires « Phenix 2030 »

The CEO of the airline announced that a business plan, prepared with members of the management team, is currently awaiting validation from the Government.

This new business plan has obtained the approval of the supervisory authorities as well as the frank support of all the technical and financial partners met. : international financial institutions, local banks, development banks, potential investors. It will be self-financed through borrowing and equity investments and will not require assistance from public finances..

Financial situation

The financial situation of the company had become worrying with, among other things, a level of debt beyond what it could bear to be able to envisage a real and lasting recovery and recovery, explains the CEO of the company..

The main cause of these abysmal losses is, among other things, having maintained, since the creation of Madagascar Airlines, a long-haul operating model with aircraft rental under the ACMI regime.. Another important cause is the high local price of kerosene.

For these reasons, the financial situation has deteriorated despite everyone's efforts.. The combined effects of the ACMI and the price of kerosene caused a monthly loss of nearly 2.8 million $ to the society.

This situation had the effect of triggering a vicious circle with the starting point being heavy operating losses on long-haul flights which quickly dried up cash flow., and by cascade effect, the inability to pay suppliers and delays in the delivery of aircraft. This operational fragility itself led to, we know it well, many delays, cancellations, and tensions float.

Temporary suspension of flights

This is why it was proposed to the public authorities, who accepted, the temporary suspension of long-haul and regional flights. Maintaining ACMI flights on the long-haul network is, you know it, economically untenable. We emphasize the temporary nature of this measure.

This temporary refocusing on the domestic network will allow us to restore the fundamentals and return to sound management principles that we had to abandon due to lack of resources. :

• Great ATR : rehabilitate and restructure it by returning certain devices ;
• Maintenance : return to preventive maintenance, replenish parts stocks, hiring and training new mechanics, etc.
• Sales and Distribution : Return to BSP/ICH/CASS as quickly as possible, migrate to PSS Amadeus, migrate to MD code
• Alliances : this return to the BSP will allow us to consider alliances with strategic airline partners ; these alliances will find their full effect as soon as we resume our long-haul operations. They can be started today
• Additional ATR crew training : As ATRs become able to fly more, we will intensify their rotations for maximum use of aircraft. We will then need to 2 or 3 additional crews

This temporary suspension is a necessary evil to be able to avoid a new blockage. IWe absolutely must straighten out our accounts without calling on public money, and regain our profitability. This decision immediately received the approval and encouragement of international financial institutions..

These flights will resume as soon as the company is able to switch to a dry lease model..

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