Madagascar Airlines takes strategic turns before the “economic catastrophe”

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A new business plan with strategic directions was presented Monday by the general director of Madagascar Airlines (formerly Air Madagascar), Thierry de Bailleul. It must enable profitability in less than two years, thanks in particular to the (temporary) suspension of international flights (towards France), or the cancellation of the rental contract for three Embraer E190-E2which should quickly be replaced by E190-E1s.

During a press conference, Thierry de Bailleul notably gave explanations for the cessation of international flights, “at least temporarily”more precisely flights ACMI (wet lease) to France. The cessation of long-haul flights remains a “temporary solution subject to the resumption of long-haul flights no longer under ACMI but under dry lease”.

International flights were not profitable because they were operated in wet lease, he pleads, that is to say with a crew that it was necessary remunerate, “while we have our maintenance workshops, our own pilots…”. “It may not have been the most efficient system. Unfortunately, we may have stayed there a little too long. » “For eighteen months”he explains then that each long-haul round trip caused a loss of something $300,000 to $320,000or about $2.8 million per month. “It’s a lot, we obviously had to stop this since we were going straight towards a economic disaster. »

ACMI flights are therefore suspended, with the approval of the public authorities under condition, adds the president director, “is that we will resume long-haul flights as soon as we have our own planes, in dry lease »therefore with their own crews. “And for that, we need a financing plan with technical and financial partners”he warns.

Another important decision, the rental contract of theEmbraer 190-E2 signed in 2022 is canceled. “After reflection, we considered that this type of aircraft is less adapted to our specific needs in Madagascar”reported Thierry de Bailleul who resolved to admit “that it is too early for Madagascar Airlines to bet on an Embraer 190-E2”. The contract was concluded with the leasing company Azorra in December 2022, for an aircraft that can accommodate up to 150 passengers and fly for 7 hours. The first copy never arrived.

For the record, reports the specialized site Air Data News, the E190-E2 jet bearing the serial number 19020016 (the famous one that Madagascar Airlines waited for all this year 2023, before the decision to cancel the order) is what one could call it a cursed plane. For two years, the Embraer aircraft was initially registered with Fuzhou Airlines, but does not have a designated registration number. The deal was closed and Embraer also placed the E190-E2 on the shipping list ofAir Astana, in Kazakhstan, without further action. Then came Congo Airways, which swaps an order of E175 for the E2. The 19020016 plane even wears the airline’s colors and also has a name, “Etienne Tshisekedi”, statesman of the Democratic Republic of Congo, former Prime Minister of Zaire and president of the Union for Democracy and Social Progress. Even though at that time the E190-E2 was operational, the Congolese airline did not take off. This is where the intervention comes Azorra Aviationan American leasing company, which is negotiating the contract with another African company, Madagascar Airlines…

Coming back to the abandonment of Embraer’s E2, the boss of the Malagasy company does not question the quality of the planes manufactured by the Brazilian manufacturer, but the reliability of its engines produced by the American engine manufacturer. Pratt & Whitney. “There are huge concerns with these engines. The engine manufacturer who designs them certainly uses revolutionary, high-performance technology, but these engines remain fragile for the moment. And this represents a high failure rate”he indicates in comments relayed by

Pratt & Whitney has indeed encountered problems with its engines intended for Embraer E2 family aircraft as well as A220 for that matter (PW1900G and PW1500G respectively). In fact, the entire family of Pratt & Whitney GTF engines has been experiencing operational reliability problems for several long months, but also slow repairs. Last July, the American engine manufacturer also announced that a number ” significant “ of its PW1100G engines equipping the entire Airbus A320neo family had to be removed for inspection.

The cancellation of E2 contract is “without damage, interest or penalty” for Madagascar Airlines. In return, the exploitation ofE190-E1 would already be an option highly encouraged by the Malagasy authorities, according to Thierry de Bailleul. Three Embraer 190-E1s are planned to be acquired.

The new strategic orientations of this business plan – others are still to come – should allow Air Madagascar to regain financial balance in less than two years »predicts its general director.

John Walker Avatar