Another causality: Air Mauritius is in voluntary administration

Air Mauritius has made this announcement:

The Board of Directors of Air Mauritius Limited met on April 22, 2020 to take cognizance of the latest financial status of the Company in light of the recent developments worldwide relating to the COVID-19 crisis.

It was noted that, in January 2020, the Board had set up a Transformation Steering Committee with a view to addressing the financial difficulties of the Company and to reviewing its business model for ensuring a sustainable future. Wide consultations were held with all concerned stakeholders and substantial progress was made in formulating the Action Plan to be recommended to the Board.

Unfortunately, travel restrictions and the closure of borders in all our markets and cessation of all international and domestic flights in an unprecedented crisis, has led to a complete erosion of the Company’s revenue base.

Furthermore, 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.

In these circumstances, it is expected that the Company will not be able to meet its financial obligations in the foreseeable future. The Board, therefore, took the decision to place the Company under voluntary administration in order to safeguard the interest of the Company and that of all its stakeholders.

Mr A. Sattar Hajee Abdoula, FCA and Mr. Arvindsingh K. Gokhool, FCCA of Grant Thornton have been appointed, under sections 215 and 216 of the Insolvency Act, as administrators of the Company, with effect from Wednesday, April 22, 2020 at 14.00 hrs.

A message for the the administrators:

With the worldwide spread of the coronavirus epidemic in recent weeks, the entire airline industry, and aviation companies in particular, have been experiencing “the worst crisis ever since World War II”.

Airlines have indeed been severely hit by travel restrictions and the closure of borders in almost all markets, as well as cessation of all international and domestic flights. This has forced several of them to have recourse to voluntary rescue processes.

This week, we have taken note of statements by Virgin Australia and South African Airways to the effect that they will be placed under voluntary administration. The situation is hardly different for Air Mauritius, due to its high degree of reliance on tourism, which is one of the most affected sectors when it comes to the Mauritian economy.

Air Mauritius has already been in a restructuring process since the beginning of the year, notably with the setting up of a Transformation Steering Committee with a view to addressing the financial difficulties of the Company, and to reviewing its business model from the strategic and operational points of view.

As administrators, our mission is above all to save the company. We know that the national airline is a key player in our economy and that it is part and parcel of our history. Air Mauritius is, in addition, a source of pride for the people of Mauritius, and there is no doubt that we are all affected by this news. In such difficult times, it is essential that we get down to work without delay, along with all the partners of this industry in Mauritius, to implement the measures deemed necessary to save the national airline.

At this stage, we are not in a position to make any further comments, having not yet been fully acquainted with all the elements pertaining to this case.

Sattar Hajee Abdoula, FCA Arvindsingh K. Gokhool, FCCA

Air Mauritius aircraft photo gallery: