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Summary
- Madagascar Airlines will receive funding from the World Bank for its “Phénix 2030” turnaround plan, which aims to achieve profitability and growth through reasonable fleet and investment choices.
- The funds will be provided by the Malagasy government upfront and will later be reimbursed by the World Bank as a loan.
- The airline will use the funds to revitalize the company, develop its fleet, enhance digital systems, and repay accumulated debts.
Madagascar Airlines (previously Air Madagascar) will receive funding from the World Bank for the implementation of its new “Phénix 2030” turnaround plan, announced earlier this month by the airline’s CEO, Thierry de Bailleul. The agreement was formalized following a meeting between World Bank representatives and Madagascar’s Ministers of Transport and Finance. The World Bank’s Director of Operations is expected in Madagascar this week to discuss the future of the national carrier.
External support
Madagascar Airlines’ Phenix 2030 business plan has received support from the World Bank following approval from the state. In the agreement, the Malagasy government will provide the funds upfront and will later be reimbursed by the bank in the form of a loan. However, the airline has not revealed how much it will receive from the state. According to 2424.mg, the Malagasy government had previously provided the carrier a $20 million sovereign guarantee to lease new aircraft – a project that was later abandoned.
Photo: ATR
Thierry de Bailleul, who has been at the helm of Madagascar Airlines for nearly a year, announced Phénix 2030 on November 6 while addressing stakeholders on several matters regarding the carrier. The new business plan demonstrates the company’s capabilities of achieving profitability and growth if “reasonable fleet and investment” choices are made. He added that the plan will be self-financed through borrowing and equity investments and will not require taxpayer money.
The carrier has faced several operational and financial challenges for years and seeks to ensure a more sustainable future with its new strategy. The funds provided by the World Bank will be allocated in two phases. In the first phase, they will revitalize the company, help it return to the IATA Financial Settlement Program (FSP), develop its fleet, and enhance digital systems. In the second phase, they will be used to repay debts accumulated since April 2022.
Madagascar Airlines Looks To Join IATA’s Billing and Settlement Plan In The Coming Months
The airline has to make a $3.5 million settlement before joining the program.
A month of change in Madagascar
November 2023 has been marked with several changes at Madagascar Airlines, starting with a change of the Chairman of the Board of Directors in the first week of the month. According to de Bailleul, the airline (under the supervision of the Ministry of Transport), including its board, management, and employees, are all moving forward to realize “Phénix 2030”. The company aims to return to balance in the next two years and ensure the quality of its services.
Photo: Pierre-Yves Babelon | Shutterstock
While the new business plan was announced, Madagascar Airlines also suspended its long-haul flights. This saw the cancelation of its weekly service from Antananarivo Ivato International Airport (TNR) to Paris Charles de Gaulle (CDG). The ACMI flights had become unsustainable for the airline, resulting in significant monthly losses. It will focus on domestic operations and resume intercontinental flights once it switches to a dry lease model. However, Madagascar Airlines entered a codeshare partnership with Corsair to continue selling tickets to France.
The Malagasy carrier is also reconsidering its plans to acquire the Embraer E190-E2 jets. It had been negotiating a lease agreement with US aircraft lessor Azorra since December 2022 for three E190-E2s. Madagascar Airlines now plans to operate Embraer E1 jets when it returns to the regional and international market.
What are your thoughts on Madagascar Airlines securing funding from the World Bank for its new business plan? Please feel free to discuss in the comments!
Source: 2424.mg
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