National carrier Kenya Airways has been shortlisted among seven airlines interested in acquiring a minority stake in Air Madagascar, which is looking for a strategic partner to help turn around its fortunes.
The management of the cash-strapped Air Madagascar recently disclosed that Kenya Airways, Air Austral, Ethiopian Airlines, Air Mauritius and South African Airlink are some of the carriers gunning for a stake of up to 49 per cent.
The government of Madagascar, with financing from the World Bank, is seeking a strategic investor “willing to invest in the company by taking minority equity shares and by bringing know-how to the airline as well as committing to run it.”
Kenya Airways’ interest in owning a piece of the Madagascar national carrier, and helping to revive it, comes at a time when it is itself in desperate need of about Sh60 billion to recapitalise the loss-making business.
The airline, which is 29.8 per cent owned by the Treasury and 26.7 per cent owned by Air France- KLM, has posted four consecutive full-year losses beginning March 2013.
In the year to March, KQ posted a net loss of Sh26.2 billion.
“Air Austral, Air Mauritius, South African Airlink and Kenya Airways are among four of the last seven finalists at the opening of the bids,” Gilles Filiatreault, Air Madagascar’s general manager, is quoted as saying by the Madagascan press.
The management of KQ, as the airline is known by its international code, did not respond to the Business Daily’s queries on the matter by the time of going to press. Air Madagascar, which is majority-owned by the Madagascan government, was founded in 1947.
Madagascar is an island nation in the Indian Ocean off the southeastern coast of Africa. Its national carrier has a fleet of 13 aircraft which fly to 18 destinations including Paris, Marseille, Mauritius, Comoros, Reunion, the Seychelles and Mayotte as well as 11 domestic routes.
The carrier has 1,117 employees and is based at Ivato International Airport in Antananarivo, Madagascar’s capital city.
Air Madagascar says it needs about $25 million (Sh2.5 billion) in the form of a loan to rescue the company burdened by high-cost debts, an ageing fleet, high staff costs and unprofitable routes.
A new board and management has already undertaken a reduction in routes and costs. The government of Madagascar recently engaged Dubai-based TroyAvi Aviation Consultants to select a suitable strategic partner, marking the next stage in the rescue plan.
“We are on schedule. Air Madagascar will resume its takeoff in the first quarter of 2017 with its new strategic partner,” said Benjamina Ramantsoa, Madagascar’s minister of transport.
Kenya Airways, which operates daily flights to Madagascar, is bidding for a stake in the ailing airline even as it looks to stabilise its business back at home.
Business Daily
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