Arjoon Suddhoo, Chairman of Air Mauritius: “The national carrier has emerged as a robust airline poised for the future"

As from the 14th of June, Air Mauritius is now a 50-year old airline. The national carrier is investing in new aircraft and enhancing its products offerings and services. Arjoon Suddhoo, Chairman, is of the view that these investments are quintessential to the company’s future.

How is Air Mauritius’ financial strength at the end of fiscal year 201/2017?

Air Mauritius will be announcing financial results on the 19th of June. We expect to be meeting our performance targets. Already for the 3rd quarter, our results were very encouraging with the first nine months of the financial year ending with a profit of 1.1 billion rupees. This is the result of reforms initiated two years ago - as from the start of Financial Year 2015/16. We embarked on a development trajectory and exercised strict cost discipline while we continued to invest in our product and services. The results of these measures were already felt during Financial Year 2015/16 when we posted much improved profits of 675 million rupees. We hope to continue on this improvement trajectory.

What are the airline’s main projects in the medium term?

The much improved financial position of Air Mauritius gives us the means to invest in the future of the company. The operating environment has become more competitive. Airlines are innovating and always striving to offer better products at competitive prices. We have to follow suit if we are to ensure the long term sustainability of Air Mauritius. This year we have announced major investments in our products. As you know, we have an order for eight new aircraft. We will be receiving our first 2 A350-900 by the end of the year. Next year we will be receiving two brand new A330 neo and later four more A350-900. 

Concurrently, we will be embarking of a cabin retrofit programme for six existing aircraft that will remain in our fleet. Therefore, as from July next year, we will be offering to our passengers an upgraded product. Full flat business class seats, more spacious and comfortable Economy Class cabins, inflight WIFI connectivity and state of the art Audio/Video on demand. 

We are confident that with these new products and the non-stop comfort that we offer, Air Mauritius will consolidate its position as leader on the market.

How will the purchase of new aircraft impact Air Mauritius cash flow?

Air Mauritius is making unprecedented investments in its future. The financial impact has been duly considered in our cash flow projections. When one plans to make investments, one also plans the investment’s payback and we are satisfied that the investments are sound.  I must point out that if we did not make these investments, the impact would have been very damaging for the long term finances of the company, but particularly on the quality of our products and services.

What are the new destinations in the pipeline?

We started double daily flights on Pierrefonds, Reunion Island as from April this year. We thus intend to tap into the potential for traffic between Mauritius and the south of Reunion. This year we will also start seasonal operations to Geneva. In November we will launch operations to Amsterdam with our partner KLM. Schiphol airport is an important hub in Europe, which will gives us better access for instance to the East European and Nordic markets.

From the inception of Air Mauritius and now, how has the company evolved?

Throughout its history, Air Mauritius has known many phases and many approaches to fulfilling its mission as a national airline and as a business. Following its incorporation in 1967, it started off as a ground operator. We owned aircraft stairs, but never lost track of our ambition to become a full-fledged airline. 

We started aircraft operations in 1972 with a small Piper Navajo that we operated to Rodrigues. In 1973 we started to operate to London, Paris and Mumbai with a VC10 leased from BOAC. It is only in 1975 that we owned our first aircraft, the Twin Otter which we used for regional operations.

Air Mauritius entered another league when we first flew our colours with the Boeing 707 leased from British Airtours. This marked the start of the Boeing era. In 1984 when we leased the Boeing 747 SP from SAA, we became a key player on the market. We offered non-stop long haul flights which became our competitive advantage. We started expanding our network.

In 1994, we were the first in the region to operate the A340. This marked the change to an Airbus fleet. With its range and operating efficiency, the A340 gave us the possibility to further expand our network. We operated to up to 35 non-stop destinations from Mauritius. 

The main difference in our operating model is that now, we operate a hub and spoke model. It is now better to offer passengers choice and flexibility on a hub than to offer many destinations where we operate only once a week. The airline industry no longer works this way. Today for example, we offer daily flights to Paris from where we offer seamless connections to more than 40 destinations in Europe. 

The aviation business is no longer what it used to be. Today, with the opening of the skies, the operating environment has become competitive, yields are low and profit margins have become thinner. Moreover, the price of fuel and the EUR/USD exchange rate have become very volatile and this can have a determining impact of airline profitability. In 2008, we have seen how volatility has had a disastrous impact on the industry leading so many airlines around the world to bankruptcy. 

I am glad to note the resilience of Air Mauritius and how during the past two years, we have emerged as a robust airline poised for the future. We have achieved this with our own internally generated funds.

As the national carrier, should Air Mauritius focus on profit-making or be part of a wider strategy?

National airlines around the world are confronted with this dichotomy. How to reconcile their mission as a national airline while safeguarding the interest of shareholders as public listed companies! I must say that for us, the answer is clear. We have to be profitable. If you are not economically sustainable, there is no way you can fulfil your mission as a national airline. In fact, a loss making national airline, instead of contributing to the development of the country, could end up being an obstacle to national growth. Sometimes some choices are difficult, but they have to be made in the long term interest of the company and that of the country.

Air Mauritius has yet to appoint a Chief Executive Officer. Should we be expecting an announcement soon? 

We will choose a CEO who has all the required competencies and who espouses the vision of the Board and shareholders of the company while being a catalytic agent who promotes team work and a motivating environment for all employees. However, I must also point out that Air Mauritius has recovered from a loss and is now poised for profits. It is also making unprecedented investments in its future. These significant accomplishments continue under the very able leadership of Raja Buton who has been Officer in Charge for a long time during these past two years. We would like to commend him and his team for the fantastic job done.

Air Mauritius staff are very vocal on matters of relevance. Are they well informed of what is happening?

The Management of Air Mauritius has constantly communicated with employees, explained the financial stakes and shared the plans of the company for the years to come. For the past few months, Management has been holding regular consultations with the unions, who are a major stakeholder. Employees are well aware of what is at stake.  Moreover, the communication exercise should extend beyond the walls of Air Mauritius.  Air Mauritius has always been and will always be close to the heart of most Mauritians and national pride should always prevail. In this context, constructive criticisms should be taken positively with a view to improving our business and service. Of course, not all criticisms are constructive. 

The airline celebrates this week its 50th anniversary. What are the promotional campaigns being run and how do they reach out to the population?

We have a number of activities lined up to mark our anniversary. We are launching occasional promotions on our website and social media. We also have treats and surprises for our passengers buying tickets from us or travelling on the 14th of June. We have launched a number of initiatives for students. The Air Mauritius Award is now open to Grade 12 (Lower VI) students. We have invited them to make a business presentation on the contribution of Air Mauritius to the nation for the past 50 years. The winning team will win a visit to Airbus Industrie in Toulouse. We will be offering a gift to all Primary School students. We are also actively involved socially, for example in environment initiatives. We have an ongoing programme to plan one tree for every Air Mauritius aircraft that takes off. 

Finally, we should remember that this celebration also commemorates the contributions of all those who have relentlessly given their time and effort and souls to the company over the last 50 years. Those contributors will celebrate themselves and they deserve more than a pat on the shoulder. This is also a celebration of the country’s achievement.