Summary
- Madagascar Airlines needs no less than $100 million to implement its turnaround strategy “Phénix 2030” and turn out to be financially sustainable.
- The recovery plan will likely be implemented in three phases, with the primary phase requiring $20 million to revitalize the airline’s fleet and digitalize its systems.
- The second phase will deal with expanding the airline’s fleet for regional operations, while the third phase would require funding for long-haul operations.
Madagascar Airlines continues to set its sights on recovery and requires no less than $100 million to finish its turnaround strategy. The brand new airline, formerly often called Air Madagascar, has been battling several operational challenges and appears to turn out to be financially sustainable inside the subsequent few years.
Financing the recovery plan
During local celebrations of International Civil Aviation Day on December 8, Madagascar’s Minister of Transport and Meteorology, Valéry Ramonjavelo, shared more details about Madagascar Airlines’ recovery plan. The corporate will need a minimum of $100 million to completely implement the “Phénix 2030” marketing strategy, first announced by CEO Thierry de Bailleul in November 2023.
The Madagascar Airlines chief disclosed that the plan had received support from technical and financial partners. It’s going to be implemented in three phases, each phase requiring a certain amount of funds. Last month, Easy Flying reported that the World Bank agreed to support the carrier’s turnaround strategy.
Photo: Mike Fuchslocher | Shutterstock
Based on 2424.mg, the primary phase requires as much as $20 million to revitalize the airline’s current fleet, improve maintenance services, and digitalize a few of its systems. The World Bank is able to finance this phase after reaching an agreement with Malagasy authorities. Nonetheless, as stated by de Bailleul, the funds will likely be provided by the Malagasy state upfront, which can later be reimbursed by the international financial institution. The Ministry of Economy and Finance confirmed this, saying,
“The state and this financial institution will establish a contract regarding the reimbursement to the state by the World Bank of expenses regarding the recovery of Madagascar Airlines.”
The second phase of implementation would require no less than $25 million for the expansion of the airline’s fleet by leasing latest aircraft for regional operations. The corporate recently abandoned its plans to accumulate three Embraer E190-E2s and is now taking a look at the E1 jets for its fleet. Within the third phase, Madagascar Airlines would require funding to lease equipment for its long-haul operations, that are currently suspended. 2424.mg reported that it plans to lease no less than two aircraft, with the A330 as the popular selection.
Photo: Pierre-Yves Babelon | Shutterstock
Meanwhile, the Malagasy carrier has temporarily suspended its long-haul services to deal with domestic operations. As such, its scheduled flights between Antananarivo Ivato International Airport (TNR) and Paris Charles de Gaulle (CDG) were canceled. The operation of ACMI flights on the route had turn out to be economically unsustainable, which, combined with other costs, caused the corporate to lose nearly $2.8 million monthly.
The temporary deal with domestic services will allow it to raised serve travelers inside the island and to return to Long-haul flights will resume when the corporate switches to a dry-lease model. Last month, Madagascar Airlines reportedly signed a codeshare agreement with Corsair to proceed selling tickets on the Paris route.
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