Air Austral: The state has asked the heavily indebted airline to completely rethink its operations

The state is putting pressure on Air Austral. Reunion Airline, which serves several islands in the Indian Ocean and connects France to Reunion and Mayotte, must fully review its activity to become viable again, the government demanded on Tuesday 19 March after a meeting between the minister responsible for overseas territories. Minister of Transport and Minister of Industries.

Air Austral, which employs around 800 people, has been reeling from debt since the Covid-19 crisis, which has brought air traffic to a standstill. At the time, the company had accumulated a debt of 300 million euros, most of which was later written off by the state. But since then she could not recover.

On March 7, the airline’s supervisory board approved the restructuring plan presented by management. This led to significant reductions in payroll (mainly through salary reductions) and reprogramming of flight plans to favor the most profitable lines.

Private and public shareholders (including regional authorities) have decided to invest an additional 10 million euros to get the company out of the water. They hope to cross 1.2 million passengers in the next financial year, which starts in April.

“will be attempted”, promised Huguette Bellon, president of the Reunion region in Paris, where she took part in a meeting with Marie Gouveneaux (Overseas), Patrice Vagriet (Transport) and Roland Lesker (Industry). With the division, the regional authority owns 44% of the capital of the company headed by Joseph Brema.

However, the government believes that the plan presented by the management is not enough to turn around the company. “The state is in a posture of support that Air Austral will demand against it”, we specify at the top of the state, after the inter-ministerial meeting. It requires efforts from all stakeholders.

We must not forget that mistakes were made by our predecessors. (…) We hope to overcome these difficulties, because we also want to reassure the 850 people working (…).

Huguet Bello, President of Reunion Region

Air Australia, a “Important Company” According to the executive, a concrete three-year turnaround plan will therefore have to be presented by the end of April to provide visibility on the company’s viability. This includes reviewing your activity from A to Z.