Air Mauritius flies back into profitability after two loss-making years
At a group level, the national carrier declared profits after tax of Euro 8.5 million (around Rs 350.7 million), compared to post tax losses of Euro 2.5 million in the previous year ended March 2013, while turnover rose 2% to Euro 461.5 million (around Rs 19 billion). (Image: Air Mauritius)
Air Mauritius declared a net profit of Euro 7.3 million (around Rs 301.2 million) at a company level for the financial year ending 31 March 2014, compared to losses of Euro 3.6 million in the year-ago period.
At a group level, the national carrier declared profits after tax of Euro 8.5 million (around Rs 350.7 million), compared to post tax losses of Euro 2.5 million in the previous year ended March 2013.
Air Mauritius also saw its turnover rise by 2% to hit Euro 459.2 million (or approximately Rs 18.93 billion) at a company level and Euro 461.5 million (around Rs 19 billion) at a group level.
Besides, the company’s gross profit of Euro 30.5 million represents a gross margin improvement of 58% compared to last year.
“This return to profitability is also good news for the country as Air Mauritius plays a key role in the tourism sector and for international connectivity and cargo transportation,” says Andre Viljoen, CEO of Air Mauritius.
Air Mauritius recovery took wings from the ‘7 Step Plan’ transformation program which was launched in February 2012.
Besides, re-balancing growth to emerging markets was further strengthened during financial year 2012-13, and the strategy paid off.
In 2012-13, a whopping 593,498 passengers travelled on the routes Mauritius/Asia and Mauritius/Africa, which represents an increase of 23% compared to financial year 2011-12.
Overall, for financial year 2013-14, Air Mauritius carried 2.6% more passengers at a total of 1.33 million passengers, even as seats offered remain unchanged at 1,869,736 over 2012-13.
Operations on traditional and emerging markets are sought to be reinforced by commercial partnerships of Air Mauritius with other airlines.
In March 2014, Air Mauritius has signed a commercial agreement with Air France to consolidate the long-standing commercial collaboration of the two airlines.
The national airline has also signed an enhanced commercial agreement with Emirates on the codeshare Mauritius/Dubai route which allows Air Mauritius’ passengers access to a much larger network via Dubai hub.
Moreover, a new agreement with Virgin Australia now allows a better service to Air Mauritius passengers in Australia.
However, the economic and operational environment continued to be challenging with high fuel costs, volatility in the EUR/USD exchange rate and the prevailing world economic crisis.
With an average of $108 per barrel for this financial year, the price of fuel remains very high. Also, though EUR/USD exchange rate has improved, accounts have been impacted negatively by the weak Indian, South African and Australian currencies.
Besides, Europe, the main tourism market for the island economy, has once again registered a drop in footfalls, adding pressure on the Mauritian tourism sector.
The airline said it is studying proposals for a new generation of aircraft from top manufacturers to replace some of its existing fleet, with first delivery scheduled for 2017-18.
“Much needs to be done as we are faced with important challenges, namely the re-fleeting exercise and the growth of our activities” concluded Dass Thomas, Chairman, Air Mauritius.
On future outlook, management noted that the implementation of the recovery plan is positively impacting the performance of the company.
It is expected that the company will further improve its performance during the financial year 2014-15 based on current operating conditions, concluded the management
Meanwhile, in a sign that the aviation industry is flying high across the Indian Ocean Region, Seychelles’ national carrier also recorded strong 2014 first quarter results with a 38.2% increase in passenger numbers to 95,372, compared to 69,009 in 2013.
Besides, Air Seychelles revenue increased 66% on the back of improved connectivity with its codeshare partner, Etihad Airways’ global network, and enhanced cargo.