Madagascar Airlines Shifts Strategy and Abandons E2 Plan, Halts Long-Haul Ops

In response to a “critical financial situation,” Madagascar Airlines (MGY, Antananarivo) has made significant strategic changes, abandoning plans to add Embraer E190-E2s and terminating long-haul Aircraft, Crew, Maintenance, and Insurance (ACMI) operations. The move comes amid losses of approximately USD50 million since its April 2022 launch, attributed to high jet fuel costs and reliance on wet-leased aircraft for long-haul flights.

Initially planning to source three E190-E2s from Azorra Aviation, Madagascar Airlines Managing Director Thierry de Bailleul cited concerns about the Pratt & Whitney PW1100G engines, expressing uncertainty about their reliability. The agreement with Azorra was reportedly canceled amicably, with no damages or penalties.

In a statement on November 7, 2023, the airline disclosed the accrual of significant losses and debts, prompting the cessation of ACMI long-haul operations to Paris CDG, St. Denis de la Réunion, and Dzaoudzi. The carrier, which utilized aircraft such as the B787-8, A330-300, and A340-300, faced unsustainable losses of USD300,000 per rotation.

Madagascar Airlines aims for a swift pivot to profitability by focusing on domestic operations. A new business plan, pending government approval, emphasizes fleet choices, reasonable investments, and independent sustainability without public funding. Plans include resuming long-haul flights within months through dry lease operations.

The carrier plans to restructure its ATR fleet, returning some aircraft and enhancing preventive maintenance. Despite facing delays and cancellations due to grounded ATRs, the airline aims to intensify rotations and hire additional crews as operational capacity increases.

The board’s chairwoman, Rinah Rakotomanga, resigned on November 3, citing the airline’s deteriorating situation. Mamy Rakotondraibe, former Director General of Caisse Nationale de Prévoyance Sociale Madagascar (CNaPS) and ex-managing director of DHL Madagascar, has been appointed as the new chairman. The change is expected to align the airline’s direction for future progress.