Air Mauritius still enjoys government protection as the sole local scheduled carrier and has successfully seen off a recent challenge to this position from local upstarts African Island Airways (AIA).
The idea for a second, regional Mauritian carrier was first floated in July 1995 by local entrepreneur Georges Chung. Chung has a number of business interests on the island and was an adviser to the Ministry of Finance under the previous administration. He is now also chairman of the Export Processing Zone Development Authority in the country.
Neither Chung nor his project manager, Nemesh Mehta, had any aviation experience. Mehta was previously with a local management consultancy. 'At the time the government was talking about regional cooperation but people were still having to fly to South Africa in order to get anywhere else in the region,' explains Mehta. He concedes that the situation has now improved but feels that there is still a long way to go. 'We wanted to develop new routes to countries with which Mauritius has very few trade links at present, such as Mozambique, Zambia, Malawi and Botswana,' says Mehta. 'And we were prepared to take that risk upon ourselves.'
As with much in Mauritius, the failure of the project is mired in local politics. Chung and Mehta claim to have got verbal backing for their plan from prime minister Sir Navin Ramgoolam in October 1995. They appointed Speedwing to conduct a viability study and put together a business plan. The £100,000 ($163,000) Speedwing plan recommended 12 routes to be operated by one Boeing 737 with a second aircraft within the first year. The airline would have made money in five years. AIA made a second presentation to the government in July 1996, during the period when Mallam-Hasham was aviation expert to the prime minister. Some time after this meeting, Air Mauritius announced plans for the Indian Ocean Alliance in late 1996. 'The bottom line is that our project was killed in favour of theirs,' claims Mehta.
The AIA team are understandably angry that their plan was not given government approval. But they may have been rather naive to think that they could take on the national carrier in a country like Mauritius and win. They have now revised their strategy and plan to launch AIA as a cargo carrier in October this year. 'We have the backing of the export sector and will undercut Air Mauritius' freight rates by 10 per cent,' says Mehta. The plan is to run an outward route from Mauritius to Liege or Ostend with a return leg via Johannesburg. The airline will operate either a McDonnell Douglas DC-8 or a DC-10. AIA is in negotiations with an African-owned cargo carrier based in Europe with a view to a joint venture.
There has been pressure from exporters for increased cargo capacity out of Mauritius for some time. Despite the liberalisation of the cargo market in November 1997, Air Mauritius has increased its market share by 2 per cent to 64 per cent. Air Mauritius insists that its cargo rates are 'among the lowest in the world'. 'I am convinced that [if AIA launches in October as planned] they will prove how competitive our rates are,' says Air Mauritius chairman Nashir Mallam-Hasham.
Source: Airline Business