Kenya Airways has expressed an interest in acquiring a 49% stake in the struggling Air Madagascar.
According to the Business Daily, the management of Air Madagascar had revealed that Kenya Airways, Air Austral, Ethiopian Airlines, Air Mauritius and South African Airlink were among those who had been shortlisted interested in taking a minority stake in the airline.
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.
“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.
Air Madagascar 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.
