In response to its critical financial situation, Madagascar Airlines has disclosed several strategic measures aimed at restructuring its operations for a sustainable future.
The airline has implemented a more efficient alignment of governance, inaugurating a new Chairman and CEO (PCA) – Mamy Rakotondraibe, with an emphasis on profitability and organizational efficiency. This realignment is designed to enhance employee performance across the board. The Ministry overseeing the airline has endorsed this immediate change, setting the stage for harmonized progress between the Supervisory Board, Executive Management, and General Management.
Phénix 2030: A Vision for Profitability
The «Phénix 2030» business plan, crafted by the General Manager and pending public authority approval, has garnered support from the Ministry of Transport. It proposes an ambitious yet prudent fleet and investment strategy, suggesting profitability is well within reach without the need for public funding.
The company’s financial troubles have been daunting, with losses of $25 million in nine months since its inception in April 2022, after the COVID crisis, and debts surging to $36 million. The main factors contributing to these losses are the expensive long-haul ACMI lease model and the high local cost of jet fuel.
CEO Thierry de Bailleul states, «The temporary suspension of ACMI flights is a painful but necessary step to avoid further financial stagnation and to restore company profitability.»
Temporary Suspension of Long-Haul and Regional Flights
Faced with untenable economics, the airline has been compelled to temporarily suspend ACMI long-haul and regional flights, though this decision is only provisional. However, international connectivity continues through a code-sharing agreement with Corsair for routes to and from Paris.
The arrangement enables both airlines to sell tickets for these flights under their respective flight numbers, despite the flights being operated by Corsair’s aircraft exclusively. Through this partnership, Madagascar Airlines will offer two weekly flights connecting Tana and Paris, utilizing either an Airbus A330-300 or an A330-900.
The Embraer E190-E2 Contract, Annulled Without Penalty
Madagascar Airlines has terminated its lease for three Embraer 190-E2 from the Brazilian manufacturer, an agreement that was initially signed in December 2022 and officially announced at the Iavoloha State Palace.
Thierry de Bailleul, the general director of the national carrier, declared the cancellation nearly a year later, explaining that the aircraft type does not meet the airline’s specific requirements. Despite the original consensus among Malagasy authorities for its use, the cancellation was agreed upon without financial penalties after discussions with Embraer’s management.
De Bailleul acknowledged the quality of Embraer’s aircraft but cited significant concerns with the reliability of the Pratt & Whitney engines on the E2 model, which are considered revolutionary yet fragile.
In lieu of the canceled lease, Madagascar Airlines is exploring other aircraft options from the same manufacturer, with a particular interest in the earlier Embraer 190-E1 model to serve the company’s regional flights and domestic mainline routes. De Bailleul has announced plans to acquire three E1 jets, which, despite using older technology and being less fuel-efficient, have proven nearly 100% reliable.
