Although it has raised some eyebrows, Air Mauritius has made a wise decision by placing itself under voluntary administration. The move allows the airline some leeway, as it freezes its debts, so that it can prepare for the time when borders are reopened and flights are reintroduced.
It is my belief that many airlines may soon follow the same path. Airlines are currently being forced to bear enormous costs such as plane leases, parking fees, salaries and rentals, at a time when they are only able to generate limited revenue through cargo. A voluntary move into administration will allow them to reduce these costs, restructure and potentially avoid bankruptcy. It will also allow them time to take a step back and reflect on the future of their businesses.
Voluntary administration also addresses the matter of ticket refund suspension in a lawful manner. Airlines simply do not have the cash flow to refund all the bookings affected by the pandemic (Iata estimated this bill to be in the area of R623bn last month) if they want to stay afloat. While refusing to grant refunds is considered a violation of consumer protection laws in many countries, an airline in voluntary administration is lawfully able to temporarily withhold the payment of refunds.
The Mauritian government, which is renowned for its astute economic policies reacted quickly to COVID-19 infections and has controlled the outbreak on the island exceptionally well. At Beachcomber Tours, we believe that the destination will be ready to receive tourists well before South Africans are able to fly there once the local travel ban is lifted. As tourism is also the biggest contributor to the Mauritian GDP, we believe that the Mauritian government will offer Air Mauritius the support needed to get through this period, as Air Mauritius plays a massive role in the success of the country’s tourism sector.
Let’s all see this move as a positive one and continue to sell Mauritius with confidence.
Terry Munro has held the position of md of Beachcomber Tours for over 30 years. Terry studied at WITS before completing his articles and going on to become a chartered accountant. He first ventured into the travel industry in 1982 after being appointed financial director of Budget Tours. Following this he went on to found Beachcomber Tours, which is the marketing arm of the Mauritian leisure group Beachcomber Resorts and Hotels, which currently operates eight beach resorts in Mauritius.
