After declaring a “critical” financial emergency earlier this month, Madagascar Airlines’ turnaround plan has received funding from the World Bank and the Malagasy government.
The carrier accumulated losses of US$25 million (R463m) in nine months in 2022 and debt of $36 million (R666m), reports flightglobal.com.
It attributed the losses to an expensive wet lease and the high cost of jet fuel in the region and says the two factors resulted in monthly losses of $2,8 million (R52m).
As a result, the airline temporarily halted all its wet-leased flights, including long-haul European flights and regional flights. Its codeshare with French operator Corsair maintained its revenue from flights to France.
“The temporary suspension of ACMI flights is a painful but necessary step to avoid further financial stagnation and to restore company profitability,” said CEO Thierry de Bailleul.
The carrier has terminated its lease with US aircraft lessor Azorra, for three Embraer 190-E2s, which was signed in December 2022, according to simpleyflying.com.
The Malagasy government has agreed to provide the funds for the recovery plan upfront, and will later be reimbursed by the bank in the form of a loan.
The company aims to return to financial stability in the next two years.
