Air Mauritius has gone into voluntary administration due to the debilitating impact of travel bans to curb the spread of the coronavirus pandemic.
Administration is similar to SAA’s business rescue process.
With state-owned airlines South African Airways (SAA) and SA Express already in business rescue, and Comair busy restructuring, it raises the question as to how long airlines in the Southern African region would be able to hold out before any – or all – are liquidated.
Air Mauritius expects not to be able to meet its financial obligations “in the foreseeable future”.
The airline’s board hopes that going into administration will safeguard the interest of the company and that of all its stakeholders. Two administrators have already been appointed in terms of the Insolvency Act of Mauritius.
The primary aim of administration is to try and salvage a company’s business, but if there are no reasonable prospects for this to succeed, an administrator may decide to terminate or dispose of all or part of the company’s assets, in the interests of creditors, employees and shareholders., according to the Global Restructuring Review.
“Unfortunately, travel restrictions (due to the pandemic) and the closure of borders in all our markets and cessation of all international and domestic flights in an unprecedented crisis, has led to a complete erosion of the company’s revenue base,” the company secretary of Air Mauritius, Roodesh Muttylall, said in a statement.
“Furthermore, there is uncertainty as to when international air traffic will resume and all indications tend to show that normal activities will not pick up until late 2020.”
