Air Madagascar: Proud even after 900 canceled flights

Subsequent to its owner’s decision to ground Air Madagascar’s Boeing 767-300ER, the airline company has suffered other setbacks, such as a shortage of jet fuel, and the fact that they could not fully exploit quite a few of its local, regional, and international routes.
A total of 900 flights, over the entire network, have been canceled.
Socially, the crisis has yet to have an impact on the salaries of the airline company’s employees.
The company’s compensation package represents 8 to 9% of its expenditures, i.e. 450,000 Euros.

The return of the Boeing 767-300ER has allowed the company to reroute some Europe, and Asia bound passengers through Reunion and Mauritius.
Although this move entailed additional costs, it alleviated the Great Island’s isolation.
The resumption of Blue Panorama’s non-stop flight to and from Europe has done little to improve Air Madagascar’s hopelessly dismal bottom line figures.
Both cargo, and passenger traffics have declined in the first 6 months of 2002, compared to the same period in 2001.

Cargo traffic, down 40.7%

To-date, international passenger traffic is down 66%, from 300,000 to 100,000 passengers.
Europe bound traffic has declined by 68% to 11,500 passengers.
Asia-bound service was hit the hardest with only 2,300 passengers, a whopping 73% decline.
Flight restrictions also affected the local network which suffered an equally catastrophic decline of 71% with only 61,500 passengers.

Cargo traffic has also suffered a considerable loss, even if the percentages are not quite as alarming: 2,122 tons in 2002, vs 3,580 tons during the same period in 2001, a 40% decline.
The biggest cargo traffic loss came from the European network which is down 71%, from 1,360 tons to 390 tons.
The local network suffered the least, with only a small decline of 11%.
This rather surprising deviation could be easily explained by a concurrent boost in raw material air cargo which was due to the inaccessibility of local highways.

Privatization reported

Rolland Ranjatoelina pointed out, “It is always urgent for Air Madagascar to pay its suppliers, especially those trading partners who sustain us on a daily basis.”
The company’s outstanding accounts payable balances have dropped from 23,000,000 Euros to 17,500,000 Euros.
It also must pay its insurance premiums which amounted to 4,750,000 Euros.
Narisoa Rajaonarivony, vice-prime minister in charge of Finance and Budget was instrumental in restarting the company.
He released 1,620,000 Euros when he performed an accounting reconciliation of State funds held within ARO Insurance.
A second installment is due for the end of July.
The company’s financial soundness is not yet reassuring, despite the fact that it is able to keep its head above water.
During the year 2000, Air Madagascar’s budget deficit amounted to 10,000,000 Euros.

The administration delegate reiterated that “for now, Air Madagascar is not for sale”.
The company had been worth approximately 150,000,000 Euros, at one time.
However, with a debt load of 18,000,000 Euros, it could easily lose half of its value.
“Why sell if you cannot make any profit?” has asked the delegate. Rolland Ranjatoelina stated that within 3 to 6 years, the company could potentially recapture the same net worth it had six years ago.

Translated by J. F. Razanamiadana