Madagascar Airlines, the national carrier of Madagascar, is negotiating a loan with the World Bank as part of its comprehensive turnaround strategy, dubbed "Phénix 2030." The airline, which has been grappling with financial challenges, has accumulated over $25 million in debt since April 2022. The loan's details are currently being discussed with the Transportation and Finance Ministers of Madagascar, with a decision expected to be finalized this month.
The "Phénix 2030" initiative comes after a period of operational reassessment for the airline. CEO Thierry de Balleuil canceled leases for Embraer E190-E2 aircraft, citing their unsuitability for the carrier's specific operational needs. This decision reflects a broader strategy to stabilize the airline's finances by making prudent investment choices and focusing on generating revenue from domestic routes before expanding internationally.
The anticipated World Bank funding aims to address immediate financial obligations, such as repaying debts to the International Air Transport Association's Financial Settlement Systems (IATA FSP). Additionally, the funds will be invested in upgrading the airline's fleet and digital systems. Initially, the government had considered a $20 million loan specifically for aircraft leases, but it has since shifted towards a more holistic approach to aid the carrier's recovery.
The airline has faced significant challenges in maintaining its operations, with supplier payment issues affecting maintenance capabilities and parts procurement. However, with the relaunch of long-haul flights and the implementation of the "Phénix 2030" plan, Madagascar Airlines is taking steps to overcome these obstacles and achieve profitability within its domestic market as a foundation for future international service expansion.
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