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Coronavirus impact: Day after Virgin Australia, Air Mauritius files for bankruptcy

Air Mauritius board says company will not be able to meet financial obligations in foreseeable future; becomes second airline to file for bankruptcy after Virgin Australia, which appointed administrator on April 21

twitter-logoBusinessToday.In | April 23, 2020 | Updated 12:48 IST
Coronavirus impact: Day after Virgin Australia, Air Mauritius files for bankruptcy

Coronavirus has claimed yet another victim from the aviation industry. Air Mauritius, the flag carrier of Mauritius, has been put under voluntary administration by its board amid the economic fallout of the pandemic. This is another airline to file for bankruptcy after Virgin Australia, which also appointed administrator to find an investor amid coronavirus crisis on April 21.

After its meeting on April 22, Air Mauritius' board stated that the company will not be able to meet its financial obligations in the foreseeable future.

"The Board, therefore, took the decision to place the Company under voluntary administration in order to safeguard the interest of the Company and that of all its stakeholders," Air Mauritius said in a statement.

A Sattar Hajee Abdoula and Arvindsingh K Gokhool of Grant Thornton have been appointed as the administrators of Air Mauritius, with effect from April 22, 2020.

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The 52-year old airline, with flight operations to 22 countries in four continents and an annual passenger count of 1.7 million passengers, said the pandemic had struck just as the company was seeking to change its business model to address existing financial problems.

Other airlines have suffered misfortunes as coronavirus-forced lockdowns keep airline fleets grounded. A day before, Virgin Australia, the second biggest airline of the country, appointed an administrator to find an investor amid rising financial implications of coronavirus. The carrier has appointed Vaughan Strawbridge of Deloitte as voluntary administrator to lead a sales process after the government rejected its plea for an A$1.4 billion loan.

ALSO READ:Coronavirus effect: Air passenger traffic likely to log 30% negative growth in FY21, says CARE Ratings

More than 10 parties have already expressed interest in recapitalising Virgin, which is continuing to fly a skeleton schedule under its current management team, Reuters quoted Strawbridge as saying.

Virgin employs 10,000 people directly and 6,000 people indirectly. It competes with larger rival Qantas Airways Ltd, which would have a virtual monopoly in Australia if Virgin stopped flying.

South Africa Airways had entered a form of bankruptcy protection in December, since then it has had to suspend all commercial passenger flights due to the global coronavirus pandemic. The South African government told the airline's administrators on Tuesday that it would not provide more funds, lending guarantees or allow foreign financing of a business rescue plan, but will work with unions to work out a new financially viable and competitive airline.

ALSO READ:Coronavirus: Virgin Australia enters voluntary administration amid debt crisis

(With Reuters' inputs)

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